Don’t expect US govt shutdown to be a long-lasting event: Seth Freeman, EM Capital Management

In an interview with ET Now, Seth Freeman of EM Capital Management talks about the US government shutdown and its impact on the emerging markets. Excerpts:



ET Now: For the first time after 17 years, the US economy has shut down. Why are the markets not panicking?

Seth Freeman: We will have to see what happens when most of the traders get to New York in the morning. The expectation is that this is not going to be a long-lasting event, although it could have ramifications all the way through to the debt limit negotiations.

ET Now: How do you see the US government shutdown impacting the emerging markets?

Seth Freeman: We saw a large amount of outflows over the last eight weeks and now the flows have started to go back into emerging markets, particularly in India in September. While we saw some growth, it does not seem likely that under current conditions that is necessarily going to be a trend. Investors will pull back and the saving grace here is that emerging markets are oversold and we are going to see a lot of Q4 adjustments to portfolios and some window dressing.