Asian markets stabilise, but ‘lengthy’ recovery seen - ADB
Capital markets in emerging Asia are stabilising as the global
economic crisis eases and investor appetite returns, the Asian
Development Bank said Tuesday.
The relative resilience of the region’s economies should help the
recovery of its equity, bond and currency markets but the road to health
will be long and hard given the uncertainty about the global downturn,
it said in a report.
Net equity outflows from the region slowed significantly in the three
months to March after a sharp withdrawal of funds in the latter half of
2008, according to the Bank’s annual Asia Capital Markets Monitor.
This suggests foreign investors are less pessimistic than they were
about the region, while net private capital flows to the region for
calendar year 2009 will likely remain positive, it added.
However, they will still be much lower than the record high seen in
2007, the Manila-based lender said.
“Emerging Asia’s financial markets were hit harder than expected last
year. But given that many emerging Asian economies will still grow this
year while major global economies contract, Asia’s financial markets
should do better than most other regions,” said ADB official Lee
Jong-Wha.
Recent market turmoil reflects the “close interconnection between
markets and economies around the world and underlines the need for
Governments and the financial sector globally to continuously improve
regulation, oversight and risk management processes,” said Lee.
Emerging Asia’s equity prices were down nearly 42 percent year on
year to March 31, with India, Indonesia and Thailand faring worst.
Over the same period, the Dow Jones Industrial Average on Wall Street
lost 16 percent.
Meanwhile, most emerging Asian currencies fell sharply against the
dollar due to heightened risk aversion and massive deleveraging.
MANILA, AFP
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