Amid uncertainty in the global markets, Chinese imports have slumped for the eleventh straight month. Cues from the domestic front are mixed as the earnings season kicks off on a negative note with Infosys. Bloomberg TV India caught up with Hans Goetti, Chief Strategist for Middle East & Asia at Banque Internationale à Luxembourg (BIL), to get a sense of fund flow movement and the outlook for India.

The fine-print of Chinese trade shows a bigger-than-expected drop in imports. How do you think this is going to play on emerging market economies?

We have a bit of counter moves in Asia as it has happened over the past few days. Ever since the Fed held on raising rates, we had a rally in emerging markets, commodities and so on. So the China data this morning, I am not sure, weighs much into what happened in Asia. That in itself does not mean China's economy is tanking. It can manage a slowdown.

What does that means for flows?

Well, of course, emerging markets have suffered again. This is as a result of disinflationary pressures in that region and fund flows have been into developed economies. We think the Fed might hold off much longer and lot of people expect that fund flows may return to emerging markets because valuations are almost back to 2009 levels. They are extremely attractive and at the very least we can see a counter move in emerging markets. We think India is well positioned because foreign money in India tends to be relatively sticky and you would need big negative news in emerging markets in general for that money to come out. So, we think India is well positioned in the emerging markets space.

When we spoke to you mid-year, you said you preferred China over India…

Well, you know you like these markets for different reasons. China obviously had its run up. India, on the other hand, is a three- to five-year growth story with no signs of a bubble. They have a lot of potential for lower interest rates because inflation is coming down. India is a great beneficiary of lower oil and commodity prices. Plus, the fact that at some point we are going to have the investment cycle re-emerging in India and of course that’s exactly what we would like to see, and that of course will propel India higher.

If someone was looking to enter India, would you say that these levels are good enough?

I think it’s a good level to get in. Yes, the earnings season will probably lead to some volatility but overall I think it’s a good entry point, especially for the stocks that are domestic oriented.

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