Arab Today, arab today volatility to dominate economy
Last Updated : GMT 14:13:09
Arab Today, arab today
Arab Today, arab today

Volatility to dominate economy

Arab Today, arab today

Arab Today, arab today Volatility to dominate economy

Beijing - XINHUA

In a world in which everyone is trying to shed debt, global investors should retain a preference for the US dollar, buy more bonds than equities and not worship gold as a safe haven. That is the asset allocation suggestion for this year from Alexander Friedman, chief investment officer of UBS Wealth Management. \"As the global economy remains fragile, volatility will remain and credits will likely outperform equities over the medium term. A diversified investment strategy is key to more stabilized earnings,\" Friedman said. According to Friedman, the deleveraging process gripping the developed world will likely continue for a number of years and remain a drag on growth. \"Therefore in 2012 and beyond, yield is increasingly important.\" Because the global economy is shadowed by enormous uncertainty, Friedman said the negative side of long-term secular trends, changing demographics, information velocity and developed/emerging growth disparities are exacerbated. \"Special events happen much more frequently and politics will play a destabilizing rather than stabilizing role,\" he said, referring to the political uprisings across North Africa and the Middle East that led to a spike in oil prices. Dan Steinbock, research director of International Business at the India, China and America Institute, echoed the view on how politics has led to unrealistic assumptions about many current issues. The initial decision to grant Greece membership in the eurozone, he said, was motivated by political considerations, not economics. As a result, Greece has been forced to adopt austerity measures, causing suffering that could have been avoided. The risk of contagion in the eurozone also emerged, Steinbock said in an e-mail to China Daily. He said the outlook for the eurozone remained gloomy, with loaning, liquidity and solvency problems. In addition, the United States debt ceiling debate led the rating agency Standard & Poor\'s to do the \"unthinkable\" and downgrade the US\' gross domestic product rating, causing the S&P 500 to plummet by 6.6 percent the following day, according to Friedman. \"That demonstrates how fragile the concept of \"risk-free assets\" is in a deleveraging world.\" Entering 2012, continued political uncertainty, including the ongoing tensions between Iran and the West, among other geopolitical disputes, is likely to increase market volatility. Most investors had believed that safe havens included gold and the Swiss franc. But the Swiss National Bank\'s intervention effectively removed the franc from the list, Friedman said. And, although gold does not have a central bank trying to depreciate its value, it dropped some 8 percent intra-day on Sept 26, underscoring gold\'s possible volatility during severe, liquidity-driven market sell-offs. Although European policy makers are busy mapping out a once-for-all bailout plan for the debt-ridden continent, Friedman said the strategy of waiting to see tangible evidence of political solutions to the European crisis, rather than being swept up in hopeful rallies, remains valid. Recent months have been marked by equity markets rallying sharply into European summits on hopes of a resolution to the sovereign debt crisis, with the results proving disappointing and markets selling off by an even greater amount. \"Politicians have in effect become a destabilizing force in financial markets,\" said Friedman. \"As a result, we start 2012 with an asset allocation that is underweight in European equities, and have a strong preference for US over European assets, including equities, corporate credit and currency.\" In addition, Norway\'s krone remains attractive to investors looking to diversify their currency exposure into solid economies because of the country\'s abundant natural gas reserves. The World Bank recently warned developing countries to prepare for the risk of a slump like the global downturn in 2008 and 2009, owing to an escalation in the eurozone debt crisis. With investors seeking higher returns, more quantitative easing has driven \"hot money\" into high-yield emerging-market economies. Therefore developing countries have been compelled to move in the opposite direction: quantitative tightening. Friedman held a positive view on China\'s economy, saying that the country remains on track to engineer a \"soft\" landing, aided by falling inflation and the first steps towards monetary easing. He forecast Chinese GDP would grow about 8 percent in 2012, as robust domestic demand and stable investment offsets slowing exports. So \"another attractive fixed income investment opportunity is Asian state-owned credits\". Recently, many research institutions have upgraded their forecast for China\'s major indicators in 2012. With inflation dropping and growth slowing, China has gently but clearly changed macro policy direction from tightening to being somewhat supportive of growth. \"Therefore, we forecast the GDP growth to reach 9 percent,\" said Zhou Hao, an economist with the Australia and New Zealand Banking Group Ltd Wang Tao, chief economist with UBS China, adjusted the forecast for China\'s export growth from flat to 10 percent year-on-year in 2012, and 2012 GDP growth forecast from 8 percent to 8.5 percent. \"As exports stay resilient, we see less policy easing than the market expects and see at most one to two cuts in the required reserve ratio,\" she said.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today volatility to dominate economy Arab Today, arab today volatility to dominate economy

 



Arab Today, arab today
Arab Today, arab today Rabia Fatima reveals role of "Facebook" in her career

GMT 13:47 2017 Friday ,24 February

Rabia Fatima reveals role of "Facebook" in her career
Arab Today, arab today Messi visit will contribute in tourism

GMT 14:04 2017 Friday ,24 February

Messi visit will contribute in tourism
Arab Today, arab today Expresses Algerian history by woody figures

GMT 13:26 2017 Friday ,24 February

Expresses Algerian history by woody figures
Arab Today, arab today Mental conflict endures

GMT 07:36 2017 Friday ,24 February

Mental conflict endures
Arab Today, arab today Media host Mona Iraqi stresses her show's success

GMT 15:32 2017 Wednesday ,22 February

Media host Mona Iraqi stresses her show's success

GMT 21:36 2017 Wednesday ,22 February

Opec needs to prolong cuts to eliminate surplus

GMT 16:32 2017 Wednesday ,22 February

US Treasury chief tells IMF to monitor currencies

GMT 16:08 2017 Wednesday ,22 February

Qatari banks merger to rebalance financial sector

GMT 05:57 2017 Wednesday ,22 February

Britain risks clash with EU over RBS bailout

GMT 05:26 2017 Wednesday ,22 February

Singapore carbon tax would hit refiners, help renewables

GMT 05:18 2017 Wednesday ,22 February

Chinese PM: US should avoid ‘trade war,’

GMT 20:59 2017 Tuesday ,21 February

Economy good, but homes in German cities overpriced
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today To hold social dialogue over secondary school

GMT 07:43 2017 Wednesday ,22 February

To hold social dialogue over secondary school
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Wafaa Amer is happy for Sherihan’s return

GMT 07:36 2017 Wednesday ,22 February

Wafaa Amer is happy for Sherihan’s return
Arab Today, arab today Milan laughs while Rome cries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 05:19 2017 Tuesday ,21 February

Salma Rashid happy for 'A Whisper of Love'

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact

GMT 20:33 2017 Friday ,17 February

To release new antiques collection

GMT 07:51 2017 Wednesday ,22 February

Mom's immune system accepts babies

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 14:29 2017 Monday ,20 February

Prepares to present her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday