How EM currency chaos is forcing governments in to action

ON ASIA

Investor sentiment shifted rapidly against Asia this year, and slowing economies alongside currency depreciation is forcing local authorities to think again. Matthews Asia's portfolio manager Sharat Shroff explains.

Over the past several years, many ASEAN economies have experienced robust growth, albeit slowing in recent periods. Indonesia, in particular, has been a darling of fixed income and equity investors. At the same time, sentiment over China has been waning, due to concerns over an economic slowdown. But in the past three months, all that seems to have turned on its head. Investor sentiment toward Asia has shifted dramatically, and in opposing directions. China was literally on a knife’s edge in June but its economy has shown some signs of stabilisation recently. Hence, concerns over Chin...