Asian News 2016
After a year of growth in 2015 Asian market seems to stall. Japanese equities fell due to concerns over global growth and decreasing commodity prices. That sent the Nikkei 225 to a 15-month low. But markets rebounded on the final day of 2015, however, as investors were rejoiced by the Bank of Japan’s announcement to set negative interest rates for the first time in its history.
As we start trading after the holiday season and thing about the year ahead of us, it’s hard to find someone who is willing to invest heavily in Asian stocks. Taking into account U.S. Dollar and rates rising and China’s growth stagnating, Asia is caught in dark place. But when a door closes a window opens and investors may be able to make profit from Asia’s markets instability.
First, U.S. rates are going upwards, and the slower they increase, the better it is for Asia, because Asian rates are falling to aid with the slowing growth. As the profit for investors' money in Asia is gradually falling, the speculative money of the markets is going to disappear as quick as it came. On the bright side, it would bring less downward pressure on local currencies, according to Credit Suisse. But it also means lower stock prices compared to earnings. Investors may demand greater reward for risk, namely, value for their money.
So if consider previous cycles, Asian stocks are likely to decrease for up to half a year and then to recover, but only once the U.S. recovery starts to help the global economy back into the up-trend. This recovery, if it comes, will be mostly concerning manufacturing exporters in Asia. The only real winners in this situation are banks. The only definite losers? Chinese and Indonesian companies that loaded up on cheap U.S. dollar debt. They now face rising debt-servicing costs due to the dollar strength.
Asian News 2016: Asian market overview
Singapore has been undercut by the slowdown in worldwide trade. The country's economy is highly vulnerable to loosing foreign investment. The banks are also to be hit by rising U.S. rates ,because the Singapore dollar is direct correlation to the US buck. The Singapore government has enough cash to help the economy on its own, but political changes that are about to happen are backtracking this effort.
Many leading analysts are talking up Japan, as they are hopeful of a repeat of last year’s strong performance. Investors are counting on corporate dividends and buybacks to improve the prices of assets even further. But hoping for the best isn’t an investment strategy. The key-resistance problem for Japanese stocks in 2016 will be the yen. Bank of Japan cannot push the currency even lower. According to some predictions we will be able see in Asian News 2016 the rise of its national currency.
Hong Kong's stocks look cheap, and Morgan Stanley rates them as “overweight.” But with its currency linked to the US dollar, it fragile enough and the property market prices are likely to fall and send waves throughout the market.