Asian investors are concerned about reduced monetary easing by global central banks and its effect on credit conditions across Asia-Pacific (APAC), according to Fitch Ratings’ first regional cross-sector investor survey.
Around 87% of Asian investors who participated in the survey said that reduction of quantitative easing by major central banks was the main risk to Asia-Pacific (APAC) credit markets, while 57% of the respondents felt that the key risks arose from property bubbles within the region, according to the first of Fitch Ratings’ regional cross-sector investor survey.
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The survey reports says that investor concerns were particularly focused on south Asia, with 80% of respondents anticipating a further economic slowdown in India, followed by 76% expecting the same in Indonesia.
The survey said that a hard-landing in China and the failure of Abenomics are some of the many concerns shared by Asian investors with decease in asset-quality in the region’s banks viewed as the main near-term risk.
Fitch believes the main factors affecting the growth outlook for Emerging Asia including India are: tighter global monetary conditions as the Fed tapers quantitative easing and downward pressure on non-fuel commodity prices from China’s slowdown as well as slower growth across the region.
The survey found that APAC region is fundamentally more resilient than in earlier decades to a drain of global liquidity, and we do not see a repeat of the Asian Financial Crisis of 1997.
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By GlobalDataThe agency has lowered GDP growth projections across EM Asia to 5.7% for this year and 5.8% for the next, from earlier projections of 6%+ in both years. But the slowdown is largely credit neutral.
The report added that lower growth may eventually help take some steam out of the market, and lower the threat of a further run-up in asset-price bubbles.
The survey was conducted between August 20 and September 30, representing views of 72 senior fixed-income investors in the APAC region, including asset management companies, sovereign wealth funds, insurance companies, pension funds, wealth managers, banks and hedge funds.
