Money management executives expect Asian economies, led by smaller markets in the region, to enjoy the strongest growth in 2011, and deliver solid market gains, according to a survey commissioned by RBC Capital Markets.
Just under three quarters of the 108 executives of asset management, private equity and hedge fund firms surveyed pointed to smaller Asian markets, including Hong Kong, Singapore and South Korea, as likely to enjoy improved growth prospects this year.
Asia's emerging giants — India and China — were likewise viewed positively, with 66% and 65% of respondents, respectively, predicting a pickup in growth.
Major developed markets inspired less confidence, with 43% expecting better growth in Europe, 42% in North America and 27% in Japan.
In a news release, Marc Harris, RBC's co-head, global research, said, “The emerging markets are more diversified than ever and are growing at different rates,” prompting investors to look beyond giants such as Brazil, Russia, India and China. Mr. Harris couldn't immediately be reached for further comment.
Just less than 70% of respondents expect Asian equity markets to rally in 2011, while the survey also yielded signs that pessimism toward Europe is receding. The percentage of respondents expecting European equity markets to fall dropped to 26% in the latest survey, conducted in January, from 40% in the prior survey, conducted in May 2010.
Sentiment regarding U.S. markets retreated somewhat from the prior survey, with 54% predicting market gains, down from 66% in May, and 53% expecting the dollar to decline, up from 24% in the prior survey.
The survey showed almost 70% of respondents predicting foreign holders of U.S. debt will face losses over the next three years, from either higher interest rates or a “perceived deterioration of credit quality.” Just less than half expect the U.S. dollar to be the dominant global reserve currency five years from now.