China, not US Fed, the bigger worry for Asia


In a recent interview with The Economic Times, Frank Benzimra, Head of Asia equity strategy at Societe Generale, discusses the Asian equity markets and the expected impacts from China's currency measures.

''The emerging markets were well prepared for the December hike. We are trying to forecast how emerging markets will get impacted from future interest rate increase. I think it's important to distinguish between evolved emerging markets and other emerging markets. The reason to discriminate is because currencies of Latin-American and Eastern-European countries have majorly underperformed this year against the Asian countries which have remained relatively resilient.

However, as we forecast for 2016 — we believe the risk is now more on the Asian currencies because of the new Chinese government policy on its currency. We expect Asian currencies to remain more vulnerable than other emerging market currencies due to depegging of the Chinese yuan from the US Dollar.''
Frank Benzimra, Head of Asia equity strategy at Societe Generale

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