Komfie Manalo, Opalesque Asia:
Tokyo-based Nikko Asset Management said the geopolitical issues around the globe are not much of a threat but warned China poses a particular concern. At the same time, Nikko AM’s Global Investment Committee met on June 24th for its quarterly review of global economic conditions and said the Japanese stocks have rallied during the second quarter.
"The world’s geopolitical situation currently is not as troubled as we previously viewed it," Nikko Asset Management said John F. Vail, chief global strategist and head of the Global Investment Committee. "Even though there are still some hot spots, on their own they’re not likely to derail steady global growth."
One particular area of concern is China’s property market. "Never has the world witnessed such a large speculative holding of vacant apartments, which will be severely tested as prices decline," Vail said. "So far there are no signs of panic, and we expect continued government reforms to begin to excite foreign equity investors in the coming quarters. In fact, the government continues to push economic reforms, which has caused junk bond yield spreads to surge and credit defaults to become common place. Ultimately these are prudent actions that will benefit the market in the long ru......................
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