DBS bank chief says Greek default would have limited impact

DBS group chief executive Piyush Gupta says that a Greek default would have limited impact on the European economy and a very small impact on the Asian economy.
DBS group chief executive Piyush Gupta says that a Greek default would have limited impact on the European economy and a very small impact on the Asian economy.PHOTO: REUTERS

SINGAPORE - 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 on Monday, after Greece voted a resounding 'No' to further austerity measures in return for bailout funds that could see it crash out of the eurozone.

Presenting the bank's outlook for the second half of 2015 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 ECB 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 overal 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.

jkoh@sph.com.sg