Emerging markets were the last to slip into the global recession but could be the first to recover as governments in China and other developing countries introduce measures to stimulate their economies, JPMorgan Chase & Co said.
Interest rate cuts and fiscal spending will help emerging economies recover eventually, even as growth and corporate profits continue to weaken early this year, analysts led by Adrian Mowat, JPMorgan? chief Asian and emerging market equity strategist, said in a report yesterday.
CYCLICAL
The analysts said they favored early cyclical stocks such as financial, domestic consumer discretionary and consumer technology companies.
?merging markets were the last into the recession and will be the first out as the move to pro-growth monetary policy will work,?the report said. ?hinese economic momentum is key to this view.?br />
China on Nov. 9 announced a 4 trillion yuan (US$585 billion) stimulus plan to bolster growth, including measures for low-rent housing, infrastructure in rural areas, as well as roads, railways and airports.
The Bank of Korea cut its main interest rate to a record-low 2 percent yesterday, joining central banks from Malaysia to Taiwan in lowering borrowing costs to revive economic growth.
?nterest rate expectations in emerging markets are changing fast,?the analysts wrote. ?he drivers are falling inflation and the need to stimulate growth.?br />
China Construction Bank Corp, Brazil? Banco Itau Holding Financeira SA and State Bank of India were among the brokerage? top picks for companies that benefit from falling interest rates, the report said.
Wal-Mart de Mexico SAB, Latin America? largest retailer, and Maruti Suzuki India Ltd, the nation? largest carmaker, could also benefit from increased government spending, the analysts wrote.
REBOUND
Separately, an Asian economic rebound in the second half shouldn? be ruled out as some indicators of future growth are showing ?urprisingly early?improvement, HSBC Holdings PLC said.
?hings look very bad for the short term,?said Robert Prior-Wandesforde, HSBC? 范ingapore-based senior Asia economist, in a report yesterday. ?ut the good news is that the longer lead indicators are providing some light at the end of what is clearly a very dark tunnel.?br />
HSBC examined 25 lead indicators of Asian economic expansion and found that many had been ?trengthening sharply?for several months.
The bank forecast growth in the region excluding Japan to slow to 5.5 percent this year from an estimated 7 percent last year, before accelerating to 7.4 percent next year.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS