Another bearish year expected for stocks
A NEW year brings with it fresh hope. In the case of the local stock market, the hope is that 2016 will improve after a wretched 2015 when the Straits Times Index dropped 14.3 per cent and volume, already declining, fell even more as the months passed.
Yet the investment community - and rarely have they been so united in their views - are looking at still another bleak year for stocks as China's economy is tipped to continue slowing down and the emerging markets (EMs) theme is no longer as fashionable as it once was.
"Asia's growth slowdown looks structural to us because of an outsized late-stage financial cycle, disproportionately high exposure to China and demographic challenges that are starting to bite,'' said Nomura in its Dec 7, 2015 Asia 2016 Outlook - Choppier seas ahead. "A Fed hiking cycle heightens the already non-trivial risk of a credit crunch in the region."
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