SEOUL (MK Business News) – There would be no “catastrophic situations with the Asian market” following the liftoff of US interest rates that started with the first hike in nearly a decade by the US Federal Reserve earlier last week, Chadha Rahul, the Chief Investment Officer (CIO) of Mirae Asset Global Investments Hong Kong Ltd, said, adding that Global investors should instead look to up investment in Asian markets due to increased opportunities following earlier exodus. Rahul has been in charge of Asian fund management at the company since he took office in 2011.
In an interview with Maeil Business Newspaper last Friday, CIO Chadha said, “We believe that the Fed’s hike is just a normalisation of the monetary policy” and since the Fed guided that subsequent hikes will be “more measured and moderated,” there will be minimal impact on emerging markets in Asia.
Asian markets are in “much better health compared to 1997” when the region was battered by currency crisis based on the macroeconomic fundamentals such as trade, fiscal and credit.
He anticipated that investment in Asian stocks would pick up by drawing in bargain hunters from the first half of 2016.
He advised against investing in the US dollar-based assets, although the US rate hike has bolstered value in dollar assets. The dollar strength usually runs on a cycle and he believes the strengthening has already passed 70 per cent of the cycle. The remaining 30 per cent will incrementally pan out over the next 12 to 18 months. Investors instead should look towards the Asian equity markets, but maintain discretion for the first half next year by watching the economic data and invest more aggressively in the second half after Chinese and Indian economies become more stable.
Chadha Rahul, CIO of Mirae Asset Global Investments Hong Kong Ltd – MK Business News
Chadha did not think investors should be too worried about the Chinese economy that is expected to slow down to the range of 5 per cent over the next two to three years as sectors like healthcare, internet, insurance and telecom will continue to flourish.
As for Japan, “for the near term, Japan can do well,” thanks to aggressive stimulus campaign dubbed Abenomics. The weakening in the yen has offered decent returns for investors, but growth prospects in Japanese capital investment will likely be constrained by the country’s structural problems stemming from aging population and high consumer debt.
He believed the Korean bourse will be able to draw foreign capital once its traditionally strong issues like IT and automobile sectors fully recover.
The subdued oil prices will work favourably to Asian economies, he said, adding that the central banks still has room to further lower their policy rates considering the low inflation.?
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