Hong Kong Singapore to raise interest rates is the
most sensitive Emerging markets or rebound next
Hong Kong, China, Singapore to the us to raise interest rates is the most sensitive Emerging markets can be out of the storm
The fed to raise interest rates for the first time in nine years, declared the United States policy normalization from theory to reality, although this is in the history of communication is one of the most fully raising interest rates, but several times in the history of and the rate test, it is a challenge for some emerging economies still.
"To raise interest rates for the first time although in the short term may cause some disturbance to the market, but in the long run is not so important. More importantly, once you start raising interest rates, in what way and how interest rates, and sat down on a longer term, these two of the biggest problems is the impact on global markets."Pilot (Vanguard) Asia, senior economist wang qian on the "first financial daily" said.
Two years ago, when the federal reserve to cut the size of the quantitative easing expected growing, emerging markets have experienced a memorable slump, 20 kinds of major emerging market currencies fell in August, individual currency hit a new low for years.This year, with the adjustment of the RMB exchange rate, the major Asian economies have experienced a sharp adjustments.Now, when to raise interest rates from expectations into reality, Asia and other emerging market economies will go?
Hong Kong, Singapore, the most sensitive
The influence of raising interest rates, is not limited to the emerging market economies.In Asia, the relatively open capital account, cash flow is the most liberal economies will be first to be affected.
Bloomberg Chen Shiyuan chief Asia economist at the "first financial daily" said that Singapore and Hong Kong, China, the two small, open economies, is probably the most obvious impact in the market, and among them, China might have a higher risk of Hong Kong.
"Capital outflows, most of the time because of local economic structure instability, now in Hong Kong real estate prices are higher, the overall economy and weak, is perhaps the most dangerous place."Chen Shiyuan thinks that future Hong Kong's economy mainly depends on the real estate and financial industry, now the real estate market is still relatively stable, but if it really caused a large amount of capital outflow, it may bring great influence on Hong Kong's economy, real estate may subsequently hit, real estate industry and the economy will be a greater downward pressure.
In the first three quarters of this year, 2.5% of Hong Kong's economic growth in real terms, in line with growth for all of last year.But the overall exports last year growth of 0.8%, in the first three quarters of this year fell 2.2% year-on-year, service
exports also fell 0.1% year-on-year, retail sales quotas fell 2.7%
year-on-year.Singapore is also facing pressure, economic growth in the third quarter of this year, according to the Singapore economy growing 1.4% a year, from the second quarter and 2% in the first quarter and 2.6% fall further, the main factors of manufacturing contraction become a drag on the economy, fell 6% year-on-year.
"Chinese Hong Kong and Singapore in the past few years are particularly benefit from the large amounts of money into the market, the local private sector leverage, increasing leverage is to drive a few years ago the important reason of their economic growth."Qian wang thought, after raising interest rates is likely to face a lot of funding outflow, rising interest rates, tightening liquidity dilemma, "(interest rates) would not necessarily bring crisis to these economies, but tight liquidity, raise interest rates and will inevitably drag on economic growth and the performance of capital markets."
In emerging markets rebound?
"The federal reserve to raise interest rates impact on other economies, mainly through two channels, one is the real economy, the other is through financial channels."Qian wang pointed out that in the past, emerging market economies in a high interest rate environment, after the dollar interest rates lead to spreads narrowed, thus inevitably appear the phenomenon of capital flow back to the United States, in this case, the impact on emerging market economies, including China's domestic liquidity.
In the past few years, emerging markets have twice in the storm.In 2013, the federal reserve cut scale of quantitative easing, including emerging economies such as India, Brazil, Indonesia is a significant impact.In August, the adjustment of RMB exchange rate formation mechanism and the federal reserve to raise interest rates expected, emerging markets falling back into the storm.
"This summer, dragged down the stock market performance, also let emerging market currencies suffered loss. Because of the financial market volatility generally before raising interest rates, emerging markets, the worst adjustment may have already happened."Abn amro bank senior economist card visa (MaritzaCabezas) think, that means raising interest rates may have some fluctuations, but will be short-term.
Haitong securities(15.78, 0.12, 0.75%) macro bond, chief analyst at Jiang Chao thinks, five rounds of raising interest rates in the United States after the 1980 s have led to a regional financial crisis, the current is not immune, the United States to raise interest rates next year is one of the world, the biggest risk, particularly in emerging markets, Malaysia, Argentina, Chile, Indonesia, Russia and Brazil debt accounted for the proportion of foreign exchange reserve over 100%, the risk alarming.
In the last round of market storm performance weak Asian economies, such as Indonesia and Malaysia, may continue to face more pressure than other economies.Chen Shiyuan believes that the two countries in the economy is still fragile, coupled with the commodity market, there are still some downside risk, while China, India and the Philippines were relatively stable.Card visa, pointed out
that other emerging economies weak fundamentals, such as Brazil and South Africa, will also be impacted by the obvious.
Overall, although the emerging markets in the overhead clouds have not fully dispersed, but most of these economies may enjoy the sunshine day in the next year.Method ChuYin global asset management, chief market strategist at Ralph's (DavidLafferty) believes that China's economic growth is slowing, disturbance in emerging markets has been an important factor, now China's economy has stabilized;On the other hand, the market's worries about the dollar crisis "excessive, commodity short pressure has been reflected in the price, in the past three years have been in emerging markets than developed markets, valuations have now has a certain appeal, next year may rebound.
China: capital outflows controllable risk
In the emerging markets in Asia, China immunity may be the strongest for the fed to raise interest rates.
From the perspective of the conduction effect of the real economy, qian wang believes that if the federal reserve to raise interest rates is based on a strong recovery in its own economic, then China's economic growth can actually benefit from the U.S. economy."But the leading role will be more and more small, the U.S. economy stronger mainly focus on domestic services and housing, import growth without overall GDP growth."
The terms of the influence of financial markets, China and other Asian emerging markets, will face pressure on capital outflows for the fed to raise interest rates."This tightening of China's financial environment, lack of liquidity, butThe central bankStill have the ability to control and the size of a certain extent, to curb capital outflows."Qian wang pointed out that the domestic monetary policy is still have a significantly lower the deposit reserve rate of space.
Capital outflow pressure, is also one aspect of the market is most concerned about.The partial doveish tone, in the morning on the 17th determines the future interest rates will be slow, hu yifan, chief China economist at ubs wealth management for the "first financial daily" said that capital outflows need to see more high-yielding investments in the United States, but for now, even if the us interest rates, return level is still lower than China, by contrast, the federal reserve to raise interest rates after instead of money to those who invest in Europe more attractive.Next year, said hu yifan, very bullish on China's bond market, as the yuan to join the Special Drawing Rights (SDRS), RMB bonds will be very attractive.
On the other hand, the U.S. interest rates for the negative impact of RMB exchange rate is relatively limited.On Friday, the central bank said it would change the peg to the dollar's exchange rate policy, to peg to a basket of major currencies.Qian wang believes that the move will make domestic monetary policy have greater flexibility, "this is equivalent to realize RMB devaluation in advance, otherwise the yuan continue to follow the stronger dollar will cause a lot of pressure, now, although the yuan against the dollar devaluation, but to a basket of currencies is still appreciation, in this case, China's monetary policy is more independent, the operation of the domestic monetary policy and more space."
Said hu yifan, the dollar has strong performance this year, next year, the weak dollar will become the main melody, "of course there are downward pressure, Asian emerging market currencies depreciated by 5% on average, next year is expected but yuan next year is expected to decline 5%. From this perspective, other countries devalued up reduced export advantage, China with other countries on the exchange rate fluctuation amplitude level, may be more beneficial for Chinese exports."