Asian equities shine post-Brexit

THOSE not closely following the markets may be surprised to hear that Asian equity markets have had two very strong weeks of gains following "Brexit" on June 23. Since the one-day sell-off following the Brexit decision, all Asian equity markets have risen, pushing the regional MSCI AC Asia ex-Japan index up by 4 per cent over the two weeks ending July 15.

While fund flows into Asian equities have yet to register a significant uptick, we believe that the longer the uncertainty surrounding the potential knock-on effects of the event lingers, the more likely that assets in Asia will benefit as investors look elsewhere to park their savings.

So far, the bond market and US equities have benefited from inflows in recent weeks, but we believe that some investors will shift to other asset classes in search of higher returns given the lower-for-longer interest rate environment.