SINGAPORE, Oct. 30, 2011 /PRNewswire-Asia/ -- Since the financial
crisis, the global markets have been experiencing many mini shocks
to the real and financial economy and especially the political
economy.
Joseph Cherian believes that another series of financial
crisis-type shocks could be on the way.
"We have to be cognizant that we could be facing another series of
financial crisis-type shocks, so risk and investment managers have
to watch their portfolio and probably, be conservative in the way
they manage their portfolio. Especially watching the risks and
downside risks, and just keep the eye on the ball," said the
Professor of Finance (Practice), for NUS Business School and the
Director for the Centre for Asset Management Research &
Investments.
So what could be the reasons behind these mini shocks?
Cherian points to the political situation in the Middle East as an
example of how it has affected markets.
"A lot of uncertainty created some oil pressure shocks, commodity
shocks, and so on. So basically, I think we are not immune to those
kinds of problems. Then the other issue would be liquidity. We have
problem in most of our Asian emerging markets with liquidity and I
think we could face a liquidity crisis primarily when funds flee
out of Asia when there's a flight-liquidity type situation, and
that may create a number of scenarios that could affect portfolios
in Asia perversely," he said
And even though it is hard to prognosticate the future, looking
forward, Madhu Gayer - Senior Vice President, Regional Head - Asia
Pacific, Investment Risk and Analytical Services for Northern Trust
- explains that the key issues for investors to consider will be in
the areas of monetary policy settings outside of Asia.
"The key issues for investors to consider will be in the areas of
monetary policy settings in the US and EU, and the resultant impact
on Asian and global investment mandates. The changing demographic
profile of many of the developed countries with increasing
concentrations of retirees thereby impacting consumption and
production, regulatory change especially in terms of derivatives
markets and the oversight of over-the-counter instruments, and the
increased correlation of global markets and asset classes which
have a direct impact on the investing aims of Asian investors
seeking diversified long term strategies," said Gayer who will be
speaking at the 5th Annual IPARM Asia 2012( http://www.iparmasia.com/Event.aspx?id=605360&MAC=PR )
conference.
SOURCE: International Quality & Productivity Centre
(IQPC)