Jakarta (Benchmark News) – Investors who collect bonds predicted Asian countries will experience volatility at least until the quarter I/2017.
NG Kheng, Head of Asia Pacific Fixed Income State Street Global Advisors, said the President of the United States elected period Donald Trump could potentially apply policy as mentioned above in the anti-globalization campaign.
“If it was executed, kejutannya will be quite large. Action selling foreign bonds market of Indonesia and Malaysia could potentially continue, “said Ng as quoted from Reuters, Monday (21/12/2016).
Trump promises to encourage economic growth and higher US inflation with fiscal stimulus is also encouraging the appreciation of the dollar against the currencies of other countries.
Expectations of rising inflation, plans penaikkan Fed Funds Rate, and the appreciation of the dollar led to the continued flow of funds out of the market the countries of Asia.
“The State should be anticipated is that got the deficit position the balance sheet transactions running and fiscal deficits, as well as countries that have foreign ownership with a large portion of the local berdenominasi in assets,” said Ng.
Based on these three factors, it is not surprising when Indonesia and Malaysia became the hardest hit countries. The reason, foreign ownership in capital markets the two Southeast Asian countries that reached more than 50%.
If the greenback continues to strengthen, he said, Indonesia and Malaysia susceptible capital outflow is more significant.
Ng said Indonesia had a better position than the fiscal effort in Malaysia in stimulating the economy.
The reason, in the next year there will be Elections in the Neighbouring Country. The rating agencies would react negatively if the Government of Malaysia provides fiscal spending is too large.
“Even the Trump effect also subside, the impact of Brexit and referendum Italy in December will join the trigger volatility in the bond markets of Asia Pacific,” he said…(Red)