Dubai: European equities may see a potential upside in coming months, according to an official with Saxo Bank, providing a potential opportunity for local investors.
“I believe European equities has a potential upside because of the quantitative easing. We have seen the worst in terms of Greek situation and Russian Ukraine situation, we believe that we have seen the worst and it would more or less play itself out. And with a weaker euro, lower oil price and the QE boost that would definitely help European economy,” Simon Fasdal, head of fixed income trading at Saxo Bank told Gulf News.
The European Central Bank (ECB) had said it would buy 60 billion euros of assets that include government bonds each month from March this year until September 2016 in order to bring Eurozone inflation to just under 2 per cent. The ECB’s quantitative easing programme could end before September 2016, Governing Council member Bostjan Jazbec.
“On the assumption that oil price stays at the present level, the major regional winner would be Asia, specifically, India, Indonesia, and also China because they are net importer. Their economies would see like a tax cut on all energy costs. The oil price would also have an inflation dampening effect. The medicine coming to Indian economy is the exact right medication at the exact right time,” said Fasdal.
Indian central bank surprisingly cut interest rates in January, the first indication of monetary easing despite repeated attempts by the federal government to nudge the bank to cut rates for growth.
