Better performance for ASEAN markets compared to extremely expensive India: UBS

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By Sanjeev Sharma
New Delhi, Oct 20 |
Capital markets house, UBS sees better relative performance for the ASEAN stock markets versus “extremely expensive India” in addition to a double upgrade for China to overweight.

“We started this year with a strong preference for ASEAN over China and Taiwan. While it has taken ASEAN a while to get going, not least given the impact of COVID-19 variants and a slower vaccine roll out that we anticipated, we still think there’s more to go in relative performance in the short-term, notwithstanding the risk of Tapering. We see even better relative performance versus extremely expensive India”, UBS said in a note.

UBS has been underweight Chinese equities since summer 2020. A recovered economy and expensive market faced tighter monetary policy while the rest of the region offered better cyclical recovery prospects and more attractive valuations.

“Sixteen months on we reverse this call. Tighter policy is working through the economy, most notably in property. But we think this is now in the price and policy is already moving though its tightest point. Relative earnings which have been very poor this year should bounce back in 2022, as cyclical upgrades in the rest of the region fade and weak earnings in Chinese internet stocks abate” UBS said.

UBS forecasts Chinese growth troughing and improving sequentially from here conversely, global growth is likely to slow progressively through 2022. Relative valuations have also reversed and should look better in 2022. Regulatory concerns are also overdone in our view, UBS said.

UBS said the major thematic call from mid 2020 through mid 2021 was to overweight the cyclical markets. “Since early summer this year, we’ve been gradually backing-off that call, as various cyclical data peaks and valuations have reached expensive levels. We’re already underweight Taiwan, but cut Australia to underweight (materials is one of our least preferred cyclical sectors), and take Japan and Korea to neutral”, it said.

Japan benefits from a better exposure to business capex, which we think still looks good in a cyclical context. But valuations for the market overall suggest similar upside to Asia ex Japan over the next 15 months or so. Nor do we see much policy drive push ROE higher. Korean equities on fundamentals look neutral, but much will depend on the memory cycle from here.

On the risks to its views, UBS said, “We’ve been cautious on Asia ex Japan equites most of this year, but now have 3 per cent and 10 per cent upside to our end 2021 and 2022 index targets. Peaking exports, fading earnings momentum, tapering and still above average valuations mean we still see more downside than upsides catalysts for the market overall”, it said.

“Key risks to our market preferences include for China, property developer problems worsening; further and regulatory measures knocking confidence and global tensions worsening; conversely more aggressive China policy easing would undermine our underweight on Australia; while we are sanguine about the potential for ASEAN to withstand higher yields, Tapering creates some downside risks here”, UBS added.

(Sanjeev Sharma can be reached at sanjeev.s@ians.in)

Source: IANS

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Does MBA really help in getting a better job offer ?

Does MBA really help in getting a better job offer ?

Most students pursuing an MBA come with the sole objective of having a decent job offer or a promotion in the existing job soon after completion of the MBA. And most of them take loans to pursue this career dream. According to a recent survey by education portal Campusutra.com  74% MBA 2022-24 aspirants said they would opt for education loans.

There are exceptional cases like those seeking master’s degree or may have a family business to take care of or an entrepreneurial venture in mind. But the exception cases are barely 1%. For the rest 99%, a management degree is a ticket to a dream job through campus placements or leap towards career enhancements. Stakes are high as many of them quit their jobs which essentially means loss of 2 years of income, apprehension and uncertainty of the job market. On top of that, the pressure to pay back the education loans. Hence the returns have to be high. There is more than just the management degree. Colleges need to ensure that they offer quality management education which enables them to be prepared for not just the demands of recruiters and for a decent job but also to sustain and achieve, all along their career path.

  • So, what exactly are the B Schools doing to prepare their students for the job market and make them industry ready ?
  •  Are B schools ready to deliver and prepare the future business leaders to cope up with the disrupted market ?  

These are the two key questions every MBA aspirant needs to ask, check and validate before filling the MBA application forms of management institutes. And worth mentioning that these application forms do not come cheap. An MBA aspirant who may have shortlisted 5 B Schools to apply for, may end up spending Rs 10,000.00 to Rs 15,000.00 just buying MBA / PGDM application forms.

While internship and placements data of some management institutes clearly indicates that recruiters today have specific demands. The skill sets looked for are job centric and industry oriented. MBA schools which have adopted new models of delivery and technology, redesigned their courses, built an effective evaluation process and prepared the students to cope with the dynamic business scenario, have done great with campus placements despite the economic slow down.

However, the skill set being looked for by a consulting company like Deloitte or KPMG may be quite different from FMCG or a manufacturing sector. Institutes need to acknowledge this fact and act accordingly.

  • Management institutes should ensure that students are intellectually engaged, self motivated and adapt to changes fast. In one word ‘VUCA ready’.
  • B Schools should encourage students to participate in national and international competitive events, simulations of business scenarios.
  • Institutes should have the right mix of faculty members with industry exposure and pure academics.

The placement records of 2021 across top management institutes indicated the fact that recruitment is happening, skilled talent is in demand and certain management institutions continued to attract recruiters even in the middle of an ongoing crisis.

It is time, all management institutes rise to the occasion, understand market realities and identify areas of improvement at both ends – students and faculty.

After all, the stakes are high at both ends. B Schools taking corrective measures will stay while those which are lagging will end up shutting down.

Author Name : Nirmalya Pal

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