Energy inflation is important with regards to rising prices in India, said Mark Matthews, managing director and head of Asia research at Bank Julius Baer, on Thursday. Matthews said another round of very good earnings growth is expected in India, while also adding that IT companies have transformed marvelously.

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“Agriculture holding up well, wages going up in the urban areas which is good for consumption. There is the issue of inflation and so I am a little concerned; it’s an issue for the rest of the world, the energy inflation. Now we are entering into winter and maybe there will be less demand for coal and therefore Coal India can provide the entire amount instead of having to buy some from overseas — that will be something to be cautious on,” Matthews told CNBC-TV18.

Also Read: Coal crisis: Economies back to normalcy leading to rampant demand, says Care Advisory & Research

On tapering, he said, “The Fed’s liquidity injection has been a big deal on the way up and withstands a reason it should be somewhat of a big deal on the way down. I cannot explain it but they have done a very good job by communicating and for about 3 months they have been dropping hints about tapering starting around November. So let us wait and see in November.”

Also Read: No power-cuts in Tamil Nadu despite coal shortage, here's why...

According to him, another round of very good earnings growth is expected in India. “On a fundamental valuation basis, the next 12 months should be flat, but looking beyond that, we are going to get another round of very good earnings growth and that’s why I would stick with it,” said Matthews.

Matthews also said that India has done a great job on the vaccination front with the total number of inoculated nearing 100 crore and daily COVID-19 cases averaging below 20,000.

For the entire interview, watch the video

(Edited by : Ajay Vaishnav)

First Published:Oct 14, 2021 9:49 AM IST