Expect more downgrades as inflation spreads to smaller countries in Asia

ON ASIA

Schroders' Louisa Lo discusses why she expects Asian equities to remain volatile.

Across Asia, inflation remains an issue. As China, Hong Kong and India show little sign of winning their wars against inflation, the ‘conflict' has spread to other economies in the region including the Philippines and Malaysia over recent weeks. Interest rates, therefore, are rising right across Asia and keeping a lid on investor sentiment. Although there are signs that investors are coming to terms with the realities of inflation - and that markets have largely priced them in - the struggle against inflation is likely to continue for longer than anticipated. Policy tightening could e...