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Alternative Market Briefing

High interest rates in Asian emerging markets return lustre to property assets - Credit Suisse, Deutsche Bank

Friday, December 18, 2009

From Christine Gaylican, Opalesque Asia :

To prevent an imminent danger of over-heating among emerging markets in Asia, state-governments and central banks are seen tightening monetary policies during the course of 2010, economists from Credit Suisse and Deutsche Bank (DB) said in separate reports received by Opalesque.

This scenario, according to a recently published Emerging Markets Quarterly Q1 2010 report (Source), Credit Suisse said economies of Asian emerging countries led by China have had enough of the fiscal stimuli, which central banks anticipate would spill over until 2011 and 2012.

Thus, the regime of higher interest rates will be the remaining option for monetary authorities of so-called “non-Japan Asia” (NJA) - comprised of China, Singapore, Malaysia, Thailand, Indonesia, and the Philippines - to sustain economic growth rates and bring back normalcy and balance in trade and consumption.

Credit Suisse chief regional economist for NJA, Dong Tao, said in a related statement (Source), that in spite this policy shift, emerging markets are still seen to attain higher economic growth, which it expects to be at 8.0% (revising its earlier forecast of 7.8%), and in year 2011 at 7.6%.

Dr. Elke Speidel-Walz, investment strategist of Deutsche Bank for eme......................

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