A Greek default would have limited impact on the European economy and a very small impact on the Asian economy, DBS Group Holdings chief executive Piyush Gupta said yesterday, after Greece voted a resounding "No" to further austerity measures in return for bailout funds, which could see it crash out of the euro zone.
Presenting the bank's outlook for the second half of next year at a client luncheon, Mr Gupta pointed out that the European private sector and Asia's exposure to Greek liabilities was close to zero. He added that the European Central Bank and other official bodies bore most of the exposure to Greek debt.
Mr Gupta also said he did not think China A-shares were overvalued, as stock indexes had remained at the same levels while the economy was growing robustly at around 7 per cent in recent years.
"Therefore, the stock market actually had a lot of catching-up to do. The fact that it went up 80 to 100 per cent (in the past months) was appropriate because it was catching up."
"I don't think there is any fundamental mismatch or mispricing in the overall structure of the Chinese market," he said.
He also noted that China's asset markets would become more volatile as China focuses on greater financial liberalisation.
This article by The Business Times was published in MyPaper, a free, bilingual newspaper published by Singapore Press Holdings.