Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013

3427

Pacific and South East Asia fund managers expect a correction

RELATED TOPICS​

After a second quarter in which Pacific and South East Asia fund investors were well rewarded, fund managers believe that the strong fundamentals supporting Asian markets remain intact

After a second quarter in which Pacific and South East Asia fund investors were well rewarded, fund managers believe that the strong fundamentals supporting Asian markets remain intact although a correction may lie ahead, according to Standard & Poor’s Fund Services’ latest sector update.

‘Despite the favourable backdrop, the managers expect Asian markets to remain volatile,’ says S&P Fund Services lead analyst Alison Cratchley, citing Angus Tulloch and Alistair Thompson of the S&P AAA rated First State Investments – Asia Pacific Leaders Fund as two of those expecting a market correction.  ‘In their view, the extent and pace of the market rebound since March has been astonishing and a correction over the autumn seems likely.’

Tulloch and Thompson are cautious on the outlook for Asia Pacific markets, believing there is little upside at current valuations. They think markets are discounting a rapid return to the pre-crisis conditions of strong global economic growth but not the possibility of a substantial pickup in inflation as a result of quantitative easing.

A more bullish view is taken by Allan Lam at one of the top performers over the quarter, the S&P AAA rated Franklin Templeton Investment Funds – Templeton Asian Growth Fund, where metals and mining companies in China and India were the greatest contributors to returns.

Lam thinks the outlook for Asian markets remains positive due to their relatively strong fundamental characteristics and faster growth compared with their developed counterparts. He expects the economy in China to grow at seven or eight per cent this year and in India at between five and six per cent, and growth to be supported by increasing domestic consumption and by government infrastructure spending.

‘Even so, Lam expects the markets to remain volatile and aims to take advantage of dips to buy stocks cheaply,’ says Cratchley.

The survey covered the second quarter of 2009 during which the median Pacific fund returned 27.4 per cent and its South East Asia counterpart 31.6 per cent. Investors in South East Asian smaller companies fared even better with the median fund returning 48.8 per cent.

Latest News

MainStreet Partners has released its latest quarterly GSS Bonds report “Summer Edition”. This edition of..
Pension and insurance firms have backed a public-private blended finance model to help navigate investment..
MSCI has announced the launch of MSCI Private Capital Indexes, writing that with growing investor..

Related Articles

Global equities will lose 40 per cent of their value if the world does not accelerate its decarbonisation efforts, new research reveals...
Global equities will lose 40 per cent of their value if the world does not accelerate its decarbonisation efforts, new..
Rod Ringrow, Invesco
Geopolitical tension has surpassed inflation as the primary concern of sovereign investors and is prompting greater interest in allocating to emerging markets, according to the twelfth annual Invesco Global Sovereign Asset Management Study...
Geopolitical tension has surpassed inflation as the primary concern of sovereign investors and is prompting greater interest in allocating to..
Green energy
2024 has been the strongest ever year for green bond sales, with deals topping USD356 billion in the first six months, according to research from Bloomberg...
2024 has been the strongest ever year for green bond sales, with deals topping USD356 billion in the first six..
infrastructure headline
The new Labour government has launched a GBP7.3 billion National Wealth Fund which will target private capital to support the UK’s growth ambitions...
The new Labour government has launched a GBP7.3 billion National Wealth Fund which will target private capital to support the..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by