Storm Ending For Asia’s Emerging Markets

The worst may be over for Asian emerging markets, according to Nomura Holdings Inc. (8604), after investors pulled billions of dollars last month on concern the U.S. Federal Reserve will start cutting back bond purchases.

“We’re through the worst of the crisis but it doesn’t mean individual countries won’t continue to suffer significant challenges,” Steve Ashley, London-based head of global markets at Nomura, said in an interview. “We remain relatively positive on the longer term performance of risk assets in Asian emerging markets.”

The outlook for Asian emerging markets remains “very positive” over the next 5 to 10 years as the amount of investments by funds in these countries will likely have to catch up with the growing size of their economies, he said in Singapore on Aug. 30.

A gauge of Chinese manufacturing index rose to its highest level in 16 months in August as new orders jumped, adding to evidence that growth in the world’s second-largest economy is strengthening after a two-quarter slowdown, according to a government report over the weekend. The Philippine economy expanded above 7 percent for a fourth straight quarter in the three months to June, a separate report showed.

The positive outlook for Asian emerging markets provides an opportunity for Nomura outside Japan, a key market, Ashley said. The number of Nomura clients in Asia ex-Japan for the global markets division doubled in the past three years, he said.

Bloomberg

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