Citibank’s Ajay Kapur said he expects equity markets in the United States, Japan and Europe to rally 10 to 15 percent in 2007, thanks to healthy corporate earnings and strong economic growth coupled with low inflation.
By contrast, emerging markets – which outperformed last year – now appear overvalued, with both India and China at risk of a correction.
“When there are elevated levels of sentiment, any policy error, any mistake obviously hurts [markets] that are most inflated,” Kapur told a news conference organized by Citibank’s private bank.Click here for the full story.
The Asia Investigator – Citigroup
Value to Regain the Upper Hand from Momentum in 2007