China is the new superpower, say EM managers
China is set to assume a global leadership role, as the US under Donald Trump seems intent to retreat behind protectionist walls, some EM managers believe.
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China is set to assume a global leadership role, as the US under Donald Trump seems intent to retreat behind protectionist walls, some EM managers believe.
Confidence among non-US investors declined significantly in November, according to the State Street Global Investor Confidence Index. Asian investors reacted most strongly to Trump’s election.
The Chinese press has been remarkably quiet on the new US president, but asset managers are weighing in on what they see as the negative impact of Trump’s protectionist views.
Out of the 500 largest asset managers, 34 are from China and they have had a collective CAGR of 18% the last five years, according to a Willis Towers Watson report.
Asian equities have enjoyed a good rally in the third quarter of this year, with a strong performance from technology stocks, but volatility is likely to remain, says Lena Tsymbaluk, research analyst at Morningstar
Thai equities have mostly recovered after plunging in the wake of the death of the King. But some sectors remain vulnerable to further downside as uncertainty remains.
China has reported annualised gross domestic product growth of 6.7% for the third quarter, in line with market expectations and the government’s own forecasts. But market watchers are suspicious about the medium-term outlook.
The lending organisation had strong words about difficulties in “critical areas”, while Rhodium Group warned that wealth management products are behind shadow financing that is driving “unsustainable” economic growth, creating conditions similar to those that led to the 2007-2008 global financial crisis.
The outlook for emerging markets is becoming more stable as falls in currency, oil and other commodity prices – added to a soft landing for China – continue to ease, argues Tai Hui, chief market strategist Asia at JP Morgan Asset Management.
In 2015, net sales of regulated funds in Asia-Pacific for the first time outpaced sales in Europe and the Americas, according to data from the Investment Company Institute. Most of the sales growth came from money market funds.
For the third time since 2013, the US index provider rejected the inclusion of China A-shares in its flagship emerging market indices, highlighting key unresolved issues.
Concerns over dilution to shareholder returns and falling profitability are the key challenges for equity markets throughout Asia, said Paul Danes, investment director and Asia CEO of Martin Currie.