Water down the boat, probably so. In the middle of a runaway out of emerging markets, investors are also withdrawing capital from Asian e...
Water down the boat, probably so. In
the middle of a runaway out of emerging markets, investors are also
withdrawing capital from Asian economies, despite good prospects for
growth and debt financing.
Foreign capital is running out of six emerging market stock markets in Asia at unprecedented levels since the 2008 global financial crisis. In particular, as of 2018 Foreign investors have withdrawn $ 19 billion from India, Indonesia, the Philippines, South Korea, Taiwan and Thailand, according to data compiled by Bloomberg.
Although emerging markets rose sharply in the first quarter of 2018 - a sign that they are still rising despite the Federal Reserve's tightening of the policy, the picture has dissipated. Last 2 months. As the US currency markets now yield about 2% and the Fed's ability to raise interest rates is higher, investors' demands for entry into the riskier asset market are rising. . In addition, trade conflicts between the US and China also have a negative impact on Asian exporters.
"This is not a great condition for emerging markets," said James Sullivan, head of Asian Equity Research (excluding Japan) at JPMorganChase. "We are only 'discounting' about two thirds of Fed's rate hikes that we forecast in the next 12 months. Although the Fed continues to be more 'hawks', the market still can not catch up. "
While many investors and emerging market analysts are optimistic about the fundamentals of the Asian market (such as world leading growth and political stability) , others began to warn as global liquidity began to decline. The Bloomberg JPMorgan Asia Dollar Index fell to the lowest level in 2018, extending a two-week downward spike after the Federal Reserve and the European Central Bank (ECB) took steps toward major normalization. book.
On Wednesday, the Federal Reserve decided to raise interest rates for the second time in 2018 and said it would raise interest rates two more times this year. The next day, ECB President Mario Draghi made a rare move to provide a "hawk" and "dove" attitude. He said the ECB is likely to end its quantitative easing (QE) program in December 2018, but expects interest rates to remain at least until the summer of 2019.
Recently, developing countries including Turkey, Indonesia, India and Argentina have raised interest rates, while the central bank of Brazil sells currency swap contracts to help stabilize the market.
This week, the Philippine central bank is expected to raise interest rates again, up 0.25% to 3.5%, based on Bloomberg survey results.
The Bank of Thailand (BoT) may keep interest rates unchanged at 1.5% for the time being. The Bath has rallied 4.7% against the dollar in the first quarter of 2018, although Thailand has a current account surplus of more than 9% of GDP and is in the longest economic growth chain of 3.5% since the early 2000s. .
Thailand's finance minister, Apisak Tantivorawong, said on Monday he was not concerned about the withdrawal of foreign investors and the central bank did not need to raise interest rates on the Fed. Meanwhile, the Thai bath hit the lowest level in 2018 in the morning session on Monday, while major stock indexes fell 1.2% to 1237 hours.
Foreign capital is running out of six emerging market stock markets in Asia at unprecedented levels since the 2008 global financial crisis. In particular, as of 2018 Foreign investors have withdrawn $ 19 billion from India, Indonesia, the Philippines, South Korea, Taiwan and Thailand, according to data compiled by Bloomberg.
Although emerging markets rose sharply in the first quarter of 2018 - a sign that they are still rising despite the Federal Reserve's tightening of the policy, the picture has dissipated. Last 2 months. As the US currency markets now yield about 2% and the Fed's ability to raise interest rates is higher, investors' demands for entry into the riskier asset market are rising. . In addition, trade conflicts between the US and China also have a negative impact on Asian exporters.
"This is not a great condition for emerging markets," said James Sullivan, head of Asian Equity Research (excluding Japan) at JPMorganChase. "We are only 'discounting' about two thirds of Fed's rate hikes that we forecast in the next 12 months. Although the Fed continues to be more 'hawks', the market still can not catch up. "
While many investors and emerging market analysts are optimistic about the fundamentals of the Asian market (such as world leading growth and political stability) , others began to warn as global liquidity began to decline. The Bloomberg JPMorgan Asia Dollar Index fell to the lowest level in 2018, extending a two-week downward spike after the Federal Reserve and the European Central Bank (ECB) took steps toward major normalization. book.
On Wednesday, the Federal Reserve decided to raise interest rates for the second time in 2018 and said it would raise interest rates two more times this year. The next day, ECB President Mario Draghi made a rare move to provide a "hawk" and "dove" attitude. He said the ECB is likely to end its quantitative easing (QE) program in December 2018, but expects interest rates to remain at least until the summer of 2019.
Recently, developing countries including Turkey, Indonesia, India and Argentina have raised interest rates, while the central bank of Brazil sells currency swap contracts to help stabilize the market.
This week, the Philippine central bank is expected to raise interest rates again, up 0.25% to 3.5%, based on Bloomberg survey results.
The Bank of Thailand (BoT) may keep interest rates unchanged at 1.5% for the time being. The Bath has rallied 4.7% against the dollar in the first quarter of 2018, although Thailand has a current account surplus of more than 9% of GDP and is in the longest economic growth chain of 3.5% since the early 2000s. .
Thailand's finance minister, Apisak Tantivorawong, said on Monday he was not concerned about the withdrawal of foreign investors and the central bank did not need to raise interest rates on the Fed. Meanwhile, the Thai bath hit the lowest level in 2018 in the morning session on Monday, while major stock indexes fell 1.2% to 1237 hours.
Source: Tang kiem son trang
