Helgens val i Europa påverkade den asiatiska marknaden

Asian stocks fell on Monday after weekend elections in Franceand Greecesaw incumbents punished amid a voter backlash against austerity measures and the ongoing battle to stabilise Euro-zone finances. Developed market bourses in Hong Kong and Japanled the declines, with falls of over 2% mid-afternoon ahead of what is expected to be a difficult trading session in Europe. Taiwan, Australiaand ASEAN markets all fell between 1 and 2%, although Mainland Chinamarkets bucked the trend to edge a little higher. The HSI Volatility Index, a measure of options prices on the Hang Seng Index, jumped 18% for the biggest gain in around six months[1]. Exporters were hit the hardest on concerns the Euro-zone project has been dealt another blow and on the back of Friday’s weaker-than-forecast US employment report. Europe and the US are China’s largest export markets. The UK market was closed for a public holiday on Monday.

 Francois Hollande defeated Nicolas Sarkozy on Sunday to become the first French Socialist president in 17 years, and has pledged to push for less austerity and more growth in the region. Speaking at the weekend, Hollande said that his election victory signaled a hope for Europethat “austerity does not have to be inevitable”[2]. However, many commentators suggested Hollande will have little room to deviate from Germany’s austerity-focused course for heavily-indebted Euro-zone member states. If Hollande were to embark on a Keynesian stimulus program for example, markets may question France's commitment to fiscal discipline, which could jeopardize its credit rating and raise the cost of borrowing. Meanwhile in weekend elections in Greece, the country’s two main parties (which back tough austerity measures) lost their parliamentary majority, throwing the country into political uncertainty. Between them, Pasok and New Democracy attracted less than a third of the vote in elections on Sunday. A radical left coalition (Syriza) came second after New Democracy, and a neo-Nazi party polled almost 7%[3]. The results call into questionGreece’s ability to impose measures needed to guarantee the country’s future in the euro.

Portfolio Manager Comment:
Teera Chanpongsang, Portfolio manager FF Emerging Asia Fund:

• “Asian equity markets have fallen once again as events in the West hurt global investor sentiment. However, I believe that the impact of these developments on the real economy ofAsiais likely to be limited and, relative to the developed world, the region should be able to maintain a healthy rate of economic expansion.”
• “Inflation has come off and government balance sheets are healthy, which provide Asian central banks ample room for monetary policy adjustments to boost growth. Powerful demographic trends and rising per capita incomes bode well for multi-year structural growth in domestic demand. Corporate balance sheets and cash flows are healthy and valuations are close to the levels seen in 2008.”
• “The best strategy to ride out short-term volatility is to use such periods as an opportunity to invest in long term winners at attractive valuations. I continue to construct the portfolio with a bottom–up stock selection approach, and include better quality companies that are growing at a higher-than-average rate. Broadly, the FF Emerging Asia Fund remains positioned to benefit from the structural trends in Asian economies.” 

[1] Bloomberg, May 7, 2012

[2] Financial Times, May 7, 2012

[3] BBC, May 7, 2012

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