Page 12 - CSA Speaker Bulletin September 2016

Page 12 - CSA Speaker Bulletin September 2016 | CSA Celebrity Speakers

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ASIAN MARKETS

China’s cities will be a key ingredient of its long-term economic success. If China can rise to that challenge, it will
be well positioned to clear the remaining hurdles in its path towards high-income status. Meanwhile in India, an
open-market economy is developing. This means the outlook is moderately positive due to a young population,
healthy savings and investment rates and increasing integration into the global economy.

We asked Sony Kapoor and Richard Duncan, two prominent Asian economic specialists and Pankaj Ghemawat,
a new generation management guru, specialising in global strategy, to give us their own opinions on the current
and future prospects for this region.

Tremendous Asian Growth
Potential is Realised

Sony Kapoor is a macroeconomist of developed country bonds already than half the global economy and
and Director of international think yield less than zero and stock and contribute more than the rich world to
tank Re-Define. Sony advises real estate valuation is nearing record global growth. This trend is likely to
central banks, large investors and levels depressing yields and creating accelerate, partly because developed
European governments on economic huge black holes in the pension and economies are in such a funk.
strategy and financial policy. insurance system.
Desperate for yield investors seeking
Most developed economies Fortunately, favourable demographics, to plug pension fund black holes,
are ageing rapidly, have catch-up growth potential, low levels increase returns and diversify
record levels of debt and of indebtedness, improving policy and excessive risk exposure to developed
face rising political risks. Out of falling political risks in most emerging economies will increasingly pile
desperation, their central banks have economies can help dispel this gloom. into emerging market assets and
lowered interest rates to rock bottom They already account for more look beyond just stocks and bonds
levels, in some cases below zero and to invest in infrastructure, private
launched large-scale programmes markets and even SMEs. This done
of quantitative easing. Despite this properly will further boost both
enormous stimulus, growth remains the near term growth in emerging
depressed, productivity is low and economies such as India, as well as
investment in many countries is falling raise their long-term growth potential.
below replacement levels. Moreover,
the fiscal, monetary and political Despite concerns about its debt
space to respond to any financial or and demographics, China remains
economic shocks has shrunk, thus promising and India, where
increasing fragility. demographics, debt levels and policy
making all look robust, is finally
Despite this poor outlook, more than starting to deliver on its tremendous
85% of the assets of global funds growth potential. The economic centre
are invested in developed country of the world continues its Asia-wards
assets, mostly stocks, bonds and drift, as India starts to support
real estate. More than $15 trillion China as one of the engines of global
growth. n

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