When US Sneezes, Asia Now Does Not Catch Cold

Source : The Business Times, January 9, 2008

THE axiom 'when the US sneezes, Asia catches cold' does not hold true any more.

Asian economies have become less dependent on the United States market, though not completely immune to its changes.

That, at least, was the consensus at the 6th Annual Business Outlook Forum, jointly organised by the Singapore Chinese Chamber of Commerce & Industry and The Business Times on Monday.

Benjamin Yeo, executive director and head of UBS Wealth Management Research, highlighted the growing importance of emerging markets like China against the declining export markets of the US.

Mr Yeo said: 'As far as Asian growth is concerned, we remain cautiously optimistic.'

He attributed his optimism to several factors including the increase in export diversification away from the US in Asia.

Currency strategist Idris Nizam analysed the possible directions of the US dollar versus the Singapore dollar and other Asian currencies like the Chinese yuan and the Malaysian ringgit.

Mr Nizam, director of foreign exchange research at UBS AG, said: 'In my view, global growth has peaked.'

He does not expect a recession in the US, but slower growth is likely.

Asian Property Equities fund manager Frankie Lee discussed the structural growth of the region and the fundamentals of domestic property.

He said that it is not too late to invest in Asia-Pacific property as valuation becomes favourable.

In fact, the timing now is as good as at any point in the past 18 months, Mr Lee said.

Vikram Khanna, associate editor of The Business Times, chaired the panel discussion that followed the analysts' speeches.