India has opportunity to capture diversification of assets away from China, says JPMorgan's Nicolas Aguzin

Nicolas Aguzin, who heads the international private bank at JPMorgan and is also the chairman and CEO of Asia-Pacific division, shared his views on emerging markets and the US-China trade war.

“When it comes to deals and downturns, deals occur when there are opportunities. Some of the opportunities that may result around what is going on in terms of the supplying chain moving a little bit perhaps from one place to another, they take some time. Companies need to make their plan assessed, so there is a little bit of a lag, I would expect the level of deals in India to continue increasing as a result of potentially more interest to come into the country,” Aguzin told CNBC-TV18 on the sidelines of JP Morgan Investor Conference.

“There are lot of service centres that today are based in India same in Philippines. We are seeing places like Vietnam that are absorbing a lot of foreign direct investment (FDI) and particularly companies that want to diversify today their bases in China, this movement they cannot be too big, the reality is that investments have been established over decades in China and to move it all of a sudden to Vietnam is not possible. So it will take some time. Most of it though will be translated through direct investment. It won’t be that much through mergers and acquisitions, it will be more direct investments, inflows of capital and I would expect India to have real opportunity to capture some of that investment that is diversified in a way from China and into other countries,” he added.

Talking about the emerging markets, Aguzin said, “When we look at the short-term specifics, whenever there is turmoil around the world or whenever there is a concern that something may happen, emerging markets (EMs) usually gets the bad part of it. So as we see some risks around the trade issues, the trade war, as people feel that there may be a recession coming or some event, EMs tend to suffer quite a bit. However, long-term prospects continue to be very strong."

“I don’t have super high expectations about an agreement or at least an integral agreement between the US and China. I do think that there could be a fair opportunity to agree on certain parts that are causing disruption today in the conversations. So that could happen. We will have mini deals, mini agreements that is my personal view but it is hard to think that in the short-term they can agree on all sorts of issues that today are creeping into the agenda,” he added.