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World economy will muddle through 2015: Allianz

Monday, January 19, 2015 - 09:35
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The global economy will muddle through 2015 in a year much like 2014, said Allianz Global Investors' global chief investment officer Andreas Utermann.

THE global economy will muddle through 2015 in a year much like 2014, said Allianz Global Investors' global chief investment officer Andreas Utermann.

"Let's not get confused of talk of Fed tightening in 2015. The global economy is not in great shape, it is not moribund. The Eurozone won't go into recession, Asia won't," said Mr Utermann, who was in Hong Kong for the fund manager's first media event in Asia last Friday.

He said that the world is still in a state of "financial repression", where central banks are printing money to keep interest rates artificially low, while attempting to stimulate inflation to reduce the value of the debt that governments have incurred to boost their economies.

In this environment, risky assets will continue to perform and Allianz, which had 386 billion euros (S$592 billion) of assets under management as of end-September 2014, will remain fully invested, he said.

At the event, Neil Dwane, chief investment officer of Europe equities, told The Business Times that after the surprise decision of the Swiss National Bank to abandon the cap on the country's currency versus the euro, Swiss stocks with global businesses like food giant Nestle were probably hit a bit too hard.

"Early estimates from analysts suggest that this 20 per cent appreciation (of the Swiss franc) takes about 6-8 per cent of earnings off those type of companies," he said.

Nestle last traded on the Swiss stock market at 64.8 francs, down about 10 francs or 14 per cent since the franc appreciation shock.

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