subscribe to our newsletter sign up

Investors warned on threats to Asian markets

Markets in Asia have survived Brexit with relatively few losses, according to global investment manager Alliance Bernstein, however investors should be wary of slow growth.

Investors in Asia are breathing a collective sigh of relief following the UK referendum, with the region appearing to have survived Brexit with relatively few losses.

However, a new report by AllianceBernstein (AB) has cautioned that the fallout might not be over just yet, flagging some signs that the region’s economies might be in for future trouble.

According to the report, exports outside of technology have been “lacklustre” and investors should remain cautious of slow growth.

“We believe that investors should remain on guard against risks of weak regional exports, as well as slower growth and reform glitches in China,” it said.

“Overall, we continue to consider poor export prospects as a key factor behind a continuation of benign growth and modest inflation, which both point to more policy easing – both monetary and fiscal policies in most countries.”

“This scenario implies lower government bond yields in the coming year.”

While Asian markets so far have proven to be fairly resistant to the uncertainty experienced internationally, a weakening Chinese economy would threaten that stability.

Chinese economic data from June indicated faltering housing investment, according to the report.

“This has reinforced our long-held view that, once housing investment slackens, the Chinese economy will be standing on just one leg, supported solely by the government’s infrastructure spending, as private sector demand remains sluggish.”

However, it wasn’t all bad news, with the region recognised for having navigated the current economic climate well.

The report credited the People’s Bank of China with “making China’s currency management much more transparent” which had in turn helped investor confidence.

It went on to state that central banks in Malaysia, Taiwan, Indonesia and South Korea have been particularly proactive in easing their monetary policies, and economic fallout as a result, while strong currency showings by the South Korean won, Indonesian rupiah and Japanese yen have all helped steady the region.

Investors warned on threats to Asian markets
nestegg logo
subscribe to our newsletter sign up
Recommended by Spike Native Network
just wondering - Fintech advisers mostly appear to invest in a bundle of ETF's. You don't mention about the additional potentials risks of ETF investments over direct.......
Mort Schwartzbord - It was always apparent from the initial announcement by Labor that the abolition of negative gearing claims would apply to all investments. This will.......
Maureen - Perhaps the change is a reflection of age. Y0unger people are not as charitable as previous generations. The older people who used to give are now.......
Ian S Falconer - The Grattan Institute have again demonstrated that they are totally out of touch with the real world.
There are 'ooo's of self employed people who.......