Global trade tensions and tariff uncertainties continue to challenge investors, yet a noticeable shift is underway. Cautious optimism is transforming into active capital flows toward Asian markets, where improving fundamentals and rising currencies offer fresh opportunities.
Analysts point to a rotation of investments from US markets to Asia, propelled by two key factors: gradual currency appreciation and an anticipated earnings inflection point. Manishi Raychaudhuri, founder and CEO of Emmer Capital Partners Ltd., noted that these trends could spark a significant turnaround in markets that have been under-owned.
Data highlights that since February the Chinese yuan has risen 2.4 percent, while the Singapore dollar and Indian rupee have gained 3.6 percent and 2.3 percent respectively. Such shifts in currency values are often a magnet for global capital as investors search for growth prospects in dynamic markets.
Further reinforcing this trend, HSBC's Emerging Markets Sentiment Survey for March revealed that 45 percent of investors view China's economic rebound as a key upside factor in emerging markets—an increase from 29 percent in the previous survey. This growing confidence in economic recovery, supported by proactive fiscal and monetary policy measures, is drawing investors away from traditional markets.
In addition, a Deutsche Bank report suggests that even amid concerns over ongoing trade disputes, supportive policy adjustments may bolster economic performance. Meanwhile, a Bloomberg report citing Goldman Sachs indicates that Japan's yen is emerging as a safer hedge; predictions forecast the currency could climb to the low 140 levels against the dollar. Experts believe that if risks of a US recession intensify, the yen may stand out as the top safe-haven asset.
As geopolitical and macroeconomic risks persist, Asia's improved market fundamentals and forward-thinking policy measures continue to build investor confidence. With a blend of robust currencies and promising earnings, the region is set to become an increasingly attractive destination for global capital in the months ahead.
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Global investors shift to Asia amid currency gains, earnings boost
cgtn.com
