SHOWS: HONG KONG, CHINA (JANUARY 14, 2014) (REUTERS - ACCESS ALL)

DAVID GAUD, SENIOR PORTFOLIO MANAGER, ASIA EX-JAPAN EQUITY, EDMOND DE ROTHSCHILD ASSET MANAGEMENT

1. (QUESTION GRAPHIC)

'Global equity markets started 2014 in a pace slower than expected. What are your views?'

2. DAVID GAUD SAYING:

'Well I think first of all, I mean we had quite a surprising positive year last year as far as equities are concerned. So it is normal that starting a brand new year, we see a bit of uncertainty and the global allocators and most fund managers need to reassess the situation and try to figure out where are the best segments, where to invest. But overall the tone is relatively optimistic, and that early signs of correction that we are seeing for the past few days, it's not surprising but more than anything in our view, this is a relatively good opportunity basically to build again positions in the equity world for 2014.'

3. (QUESTION GRAPHIC)

'The U.S. job data fell below expectations but not the unemployment data. Will these affect the Fed's pace of QE withdrawal?'

4. DAVID GAUD SAYING:

'Yes they would and it's not the only factor. We know now quite clearly that the Fed is considering a number of criteria when it is considering its future policy and any measures of further tapering. You mentioned the payroll data, they are one very important criteria to the Fed. Another one would be the yield curve and any stress on the ten-years yield or any signs of you know, narrowing in the credit market in the U.S., that would definitely slow down the pace of tapering and tightening of the Fed. So we are in a scenario where things are going to move very slowly and that should be taken relatively positively by the market because the liquidity condition should remain quite good. We know on top of that, the Bank of Japan is still expanding its balance sheet. The one big question mark is the ECB in Europe, but we know that at some point this year, they are going to have to intervene and they are going to have to come to support further the European economy. So that put together three major banks which are relatively favorable to you know a smooth pass in terms of liquidity for most of the year. So that should make the investors relatively comfortable with investing further in the equity world this year.'

5. (QUESTION GRAPHIC)

'What is your outlook for the Indian stock market?'

6. DAVID GAUD SAYING:

'Well first of all, I mean one must say that the situation has improved a lot in India over the past few months. If you look at the current account deficit, if you look at the relative stability in the currency, if not strengthening over the recent weeks. These are positive signs. On top of that we know that the commodity cycle is not resuming very fast and very quickly, so from a pricing point of view, this should not weigh too much on the inflation risk in India. One issue still there is the fiscal deficit, which is difficult to control. We heard about possible privatization that should help basically the state. But so net-net the situation has definitely improved. And when you compare to other emerging markets - let's talk about Turkey, let's talk about Brazil, we can talk about Indonesia, or even Thailand - India in the end is doing relatively better now and the visibility on the Indian economy seems to be more assured for the next few months, quarters than it is for a lot of other emerging markets. On top of that, the valuation of the Indian market, yes, it's still trading at a premium to the rest of Asia, but that premium is actually is narrower as it used to be on average. And in absolute terms, the Indian market, if you look at the P/E for instance, is not that expensive at this point. And the growth, the earnings growth expected for the next fiscal year is superior to the rest of the region. So that makes a relatively good case to invest further in the Indian economy at this stage.'