Yesterday, Greece missed yet another deadline for a new bailout, boosting investors’ concerns across the globe as the chances of EU-IMF aid fade. Still, Chief Investment Officer of Matthews Asia Robert Horrocks believes Greece should be treated like a “sideshow,” claiming that a default would not have such a dramatic effect on global economy.
“We all accept that Greece will have to reschedule its debt, it may default at some time, but it’s 0.4% of the global economy. It’s not a big economy like Italy or Spain- it’s not that important,” Horrocks said controversially last week.
Horrocks continued, stating that the European Central Bank is unlikely to stand aside is another crisis arises. “It’s inconceivable that the ECB wouldn’t apply the same solution again if Europe got into trouble again. So I think the worst has passed.”
According to Horrocks, Europe’s “moment of crisis” was during the Italian bond yields surge. He feels that investors, especially in Asia, have been discouraged from investing in the region despite the fact that they are well shielded from any potential damage.
“There’s an awful lot of pessimism out there, there is a lot of focus on unemployment in the U.S., on debt problems in Europe and I think we’re missing the points that Asian markets look cheap,” he said. “With valuations where they are, you don’t want to be too pessimistic that you miss out on an opportunity.”