Hong Kong: Asian stock markets will attract more funds in the next two to three quarters because of the continuing US credit crisis, said Sean Darby, head of regional strategy at Nomura Holdings Inc. in Hong Kong. “Problems in the last couple of months are not likely to suddenly disappear,” Darby told reporters at a briefing in here on Tuesday. “The situation is unlikely to improve until at least the second half of next year.”
The collapse of the US subprime mortgage market has led to about $76 billion (Rs2.99 trillion) of losses and markdowns at securities firms and banks this year. A total of $2.3 billion in funds came into regional markets in the first week of December, according to a Citigroup Inc. research note dated 10 December, citing data provider EPFR Global.
“There’ll always be money attracted to financial centres which are considered healthy,” Darby said. “At least until the middle of next year, I wouldn’t see flows of money stop coming to our part of the world.”
Darby identified Japan and Singapore as his favourite stock markets, saying Japanese stocks are “really good value now. There’s not much downside left. A lot of the bad news is already in the price”.
He counts China and India among his least favourite markets.