Expert reveals biggest concerns of world's top CEOs – #JHedzWorlD

Marios Maratheftis, the Global Chief Economist of Standard Chartered Bank, is the person sought by top-level CEOs for advice on big industrial leaps.

Nowadays, he says, three of the biggest concerns for them are the Fed’s interest rate hikes, the deceleration of the Chinese economy, and the big drop of oil prices.

The 25 basis points that the U.S. Federal Reserve has hiked may seem a small movement, but Maratheftis notes that after nine and a half years of cutting rates, the first hike in December 2015 indicates that there’s more to come.

“It signals a change in the regime and in the world order. And it has been significant. We’ve seen a lot of currencies, especially in emerging markets, moving quite rapidly in anticipation of a hike,” he tells Cathy Yang on The Boss.

He also says the U.S. economy will probably slow down this year and could see a shallow, short-term recession in 2017.

He predicts, however, that after one more hike this month, the Fed’s next move will be a cut. While this decline is always a bad thing, the interest cuts mean more capital flow into emerging markets.

The second biggest economy in the world has also seen a slowdown the previous year. The Chinese economy, however, is slowing down by design, with their policy-makers opting to shift their economic model from manufacturing and construction to a more sustainable model of services and construction.

Maratheftis says it is inevitable that there will be a slowdown, but the market’s reaction to it is much ado about nothing.

“The Chinese have the tools to maintain growth of up to 7%. They can cut interest rates, they can cut their reserve requirement ratio if they want to, and they can use fiscal policy and spend more in their economy. They’ve implemented these measures already.”

Problems in the petroleum industry, Maratheftis maintains, is rooted on the huge drop in prices over very little surplus in oil. With only a million barrels in excess per day, the supply can deplete quickly.

Standard Chartered estimates the price of oil to rise from $30 per barrel to $60-$70 per barrel should this continue. He adds that “the question isn’t the demand, because people are still buying; but are there going to be enough sellers or suppliers to satisfy that demand? Our answer is no.”

Considering all of the aforementioned, his recommendation to the captains of industry for years 2016 and 2017 is to “retreat, regroup, rebound.”

Although financial markets are in the retreat phase, the fundamentals indicate, according to Maratheftis, that the current situation is not as bad as the markets have expected.

Expert reveals biggest concerns of world's top CEOs – #JHedzWorlD