Practical analysis for investment professionals
16 December 2014

Global Market Sentiment Survey: Asian Investors Concerned about Money Supply Contraction, Says Paul Smith, CFA

Financial professionals in Asia expect better economic growth in 2015, but have major reservations about the overall investment picture, says Paul Smith, CFA, managing director of the Asia-Pacific region at CFA Institute. He spoke to Channel NewsAsia about the release of the CFA Institute 2015 Global Markets Sentiment Survey (GMSS).

The chief cause for their anxiety, Smith explained, is global liquidity.

“Asian equity markets are concerned about any contraction in the money supply,” Smith said. “Whether you look at that from a US perspective, the end of quantitative easing, a possible increase in interest rates — everyone in Asia is very conscious that our markets, to a large extent, depend upon global liquidity. And I think that’s the biggest theme that comes out of our survey. From an Asian perspective, our worry is a contraction in global market liquidity.”

Indeed, what is striking is that Asian investors are actually more wary of interest rate hikes than are their US and European counterparts.

Still, these concerns aside, GMSS survey participants are bullish on three markets in particular, Smith summarized, “They like China, they like India, and they like North America. Those [are] the three big equity market themes.”

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

About the Author(s)
Paul McCaffrey

Paul McCaffrey was formerly the editor of Enterprising Investor at CFA Institute. Prior to that role, he served as an editor at the H.W. Wilson Company. His writing has appeared in Financial Planning and On Wall Street, among other publications. He is a graduate of Vassar College and the Craig Newmark Graduate School of Journalism at CUNY.

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