Indian banks more appealing to investors than Chinese banks: Vikas Pershad

Vikas Pershad, Founder & CEO, Veda Investments

You were recently in China, any readings about the health of the banks over there and how do you think they would compete with this situation in terms of policy moves and any exposure if you would have to Chinese equities?

There is a disconnect between what the government would like to have happened and what the banks actually have been doing. So on and off, just as I have been very bullish on the Indian banks, I have been bearish on the Chinese banks. So over the past few years, on and off continue to have a short bias on them because it is fine for the government to want to do something and they continue to do that tightening money for example but the lending standards are very lax. Aside from some of the biggest banks in China, there will be asset quality issues and then as far as the Indian versus the Chinese markets go, structurally they are very very different. Chinese market, the Asia market is very closed off to foreign investors, you cannot show there is no futures and options market. India might trail China in terms of infrastructure and other things but the equities market, the capital markets are far more sophisticated and far more appealing to investors than the Chinese banks.