随着美联储隔夜正式宣布降息50基点，The Fed has signaled a more accommodative stance toward the central banks of emerging markets that have not yet begun to cut interest rates, as there is more room for central banks in Southeast Asia to ease monetary policy, and local market prospects are generally bullish.
The Federal Reserve's first major rate cut in four years sends a signal of easing to central banks in emerging market countries, and the outlook for Southeast Asian markets is optimistic.
A rate cut by a central bank usually leads to a depreciation of local currency, which can cause issues for central banks in emerging market countries such as currency depreciation, declining investment attractiveness, rising import prices, and subsequent inflationary pressures.
With the Federal Reserve's overnight announcement of a 50 basis point rate cut, other central banks that have not yet entered an easing cycle can now confidently join the rate cut club, and these central banks are mainly located in Asia, especially Southeast Asia.
Currently, central banks in Southeast Asian countries are on the edge of an easing cycle.
The Philippines took the lead in cutting interest rates in August, and supported by strong expectations of a rate cut by the Federal Reserve, Indonesia lowered its key interest rates this Wednesday. JPMorgan predicts that India will cut rates next month, while the central banks of South Korea and Thailand will take action before the end of this year.
Due to the central banks in Southeast Asia having more room to relax monetary policies, the local market outlook is generally bullish.
Joevin Teo Chin-Ker, Investment Director of Orient Exchange Singapore Limited, holds a bullish outlook on the bond and currency markets in Southeast Asia.
Actual interest rates in Southeast Asian countries are higher than a year ago, with further room for interest rate cuts, which is bullish news for the local bond market.
In the past two months, fund managers have consistently increased their shareholding in sovereign bonds of Thailand, Indonesia, and Malaysia. For the past three months, they have been net buyers of stocks in Indonesia, Malaysia, and the Philippines. This inflow of funds has helped Southeast Asian currencies become the best-performing currencies in emerging markets this quarter.
Furthermore, the valuation advantage and low labor costs in the Southeast Asian region also provide positive prospects for the local market.
Editor/ping