A rise in interest rates from the US central bank, the Federal Reserve could trigger a sell-off of shares on the stock exchange in Asia and trigger a capital outflow in China, according to an analysis of Sam Le Cornu, head of research Asia-listed stocks and investment head at Macquarie Investment Management, Friday.
Quoted from CNBC, Le Cornu said the market has been fixated on the steps the central bank monetary policy lately, with speculation of a rise in interest rates by the Fed next month increased after some policies suggest the world's biggest economy was taking a step increase mass. Increase that may be done by the Fed will occur at a time when the world's largest economy central banks such as the Bank of Japan and European Central Bank are still hesitant to provide additional stimulus.
"Unfortunately, this sentiment has a tremendous amount of influence on the market. If there is a rise in the interest rates the Fed, there will be implications for equities in Asia, "said Le
"All assets are usually not yet calculate the factor increase in the interest of the Government," Le Cornu told CNBC. "The increase in risk-free interest rate it can damage equities," he continued.
Le Cornu also said he hoped the Fed Chairman Janet Yellen to address what will be in The Fed's monetary toolbox and medium-term implications of the rise in interest rates in his speech at the Fed's Symposium in Jackson Hole on this day.
The market has behaved calmly this week because traders pull out of deals on the sidelines of the annual meeting of the world's top central bankers, themed
"Designing a monetary policy that has the Resilience for the future."
The stock markets of developing countries had benefited from the low interest rates in developed markets as investors seek higher returns have been piling up money by buying an asset in developing countries that offer higher yields because the interest of the State in reference berjembang more than 3, even 6.5% in Indonesia. A tightening of monetary policy in the US is expected to push U.S. Treasury bond yields and bond yield narrowing the gap of developing countries, reversing capital flows.
Higher interest rates in the U.S. could have adverse implications for China, the world's second largest economy. the capital outflow has subsided recently could happen again, said Le Cornu.