Asian markets offer the best opportunities of the developing countries – Michael Schürmann, investment expert at Gries & Heissel Bankiers AG gives his view of the market.
Autumn, dreaded by many investors, has so far shown us its sunnier side. Since the turnaround in March, stock markets have rallied impressively, interrupted only by an adjustment phase in June. How this continues will be shown by the earnings season, which has now begun.
Despite some positive reports from businesses, mostly in the technology sector, forecasts from certain banks have made it clear that the financial crisis is far from over. We can expect high write-downs that will need to be compensated for by investment banking which is going well. A change in mood on the financial markets would therefore seem unlikely.
Moderate economic recovery in 2010
In Europe and the USA we have seen little evidence that would lead us to expect any significant economic recovery. So we can only assume a moderate level of recovery looking forward to 2010. This is not necessarily bad news for the stock markets, since inflation could initially stay low and encourage loose monetary policy. The less attractive returns from alternative investments would also further benefit shares. At the higher level, substantial companies with sustainably high dividends should be the first choice. Quality will gain in importance if our positive economic predictions are not realised.
Asian economies with potential
Long-term share commitments in developing countries seem far more attractive than those in industrialised countries, since they have robust economic growth. In contrast to industrialised countries that have been weakened by the recession and excessive national debts, the Asian economies are showing a high growth dynamic. Even in this difficult year, experts predict growth of 5.5%, with 7% forecast for the coming year.
Good conditions for the future
In the long-term, it is likely that Asia will reclaim the central position in the global economy that it enjoyed in the 19th century. As well as rapid population growth, which brings with it enormous consumer demand, low debt levels and high currency reserves provide good conditions for the future. The varying levels of industrialisation within Asia also lead to increased Inner Asian trade and regional division of labour. As well as the economic giants China and India, ASEAN countries such as Indonesia and Vietnam are also increasingly profiting in this way.
Long-term investment
It is important for the investor in shares to take advantage of Asia’s excellent prospects through long-term investments, and not to be perturbed by above-average price fluctuations along the way. Investment funds such as the Templeton Asian Growth fund seem particularly well suited. They invest all across Asia and focus on different countries and sectors depending on current circumstances.
Author: Michael Schürmann
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For further information:
Martina Fassbender
Telephone: 0611 773 25 71
E-mail: martina.fassbender@deltalloyd.de
Notes to editors:
About Gries & Heissel:
With headquarters in Wiesbaden, Gries & Heissel Bankiers AG is a prestigious private bank which concentrates on private banking services out of its branches in Wiesbaden and Berlin. Since it was founded in 1987, the private bank has provided its exacting clients with comprehensive individual consultancy services, focusing not on selling its products, but on developing a tailor-made finance concept, measured precisely to the risk appetite, current stage of life and personal preferences of the client. Further information is available at www.guh.de
About Delta Lloyd:
Delta Lloyd Germany is a 100% subsidiary of Delta Lloyd Group, Amsterdam, and therefore part of the British Aviva Group. The company offers a one-stop shop for a wide range of financial, investment and provident products and also provides expert advice on all financial matters. In addition to Delta Lloyd Leben and Hamburger Leben, a pension fund and a consultancy for occupational pension schemes, the Delta Lloyd Group in Germany also comprises the private bank Gries & Heissel and a mortgage brokerage.