The Global Economic Outlook

At a joint luncheon meeting of AmCham Taipei’s Asset Management, Banking, and Capital Markets Committees on Oct. 20 at the Grand Hyatt Taipei, Belinda Boa, the Hong Kong-based Managing Director of BlackRock Asset Management North Asia, gave a presentation on “Global Economic Outlook,” providing a briefing on the global BlackRock investment team’s assessment of the prospects for the world economy in the year ahead. Among her key points:

  • A gradual rise in interest rates can be expected in the U.S., probably regardless of who is named as the next Federal Reserve chairman. After having forecast rate hikes many times that did not occur, most other analysts are no longer making that prediction. But BlackRock expects rates to increase, though not to the same level as before the global financial crisis.
  • Investors should not necessarily be put off by the currently high equity valuations in the U.S., as the price has been justified by earnings. But preference should be given to other markets. The environment seems especially favorable for emerging markets.
  • Geopolitical factors are injecting more unpredictability than usual into the market. Some major examples are the North Korean nuclear threat, renegotiation of the North American Free Trade Agreement (NAFTA), and growing tensions between the United States and China. There is concern over the possibility of a geopolitical surprise.
  • BlackRock expects sustained economic expansion and is positive on “momentum” and “value” stocks, especially in emerging markets, Japan, and Europe (it is neutral on U.S. stocks). On the fixed-income side, it likes U.S. investment-grade credits.

From left to right: Vincent Ma, CEO / Managing Director, BlackRock Investment Management (Taiwan) Ltd.; AmCham Asset Management Co-chair Christine Jih, Chairman & Chief Executive Officer of BNP Paribas Investment Partners Taiwan Co., Ltd.; AmCham President Andrea Wu; Speaker Belinda Boa, Managing Director, Head of Active Investments for Asia Pacific and Chief Investment Officer (CIO) of Emerging Markets Fundamental Active Equity of BlackRock; AmCham Governor Leo Seewald, Chairman / Managing Director, BlackRock Investment Management (Taiwan) Ltd.; AmCham Asset Management Co-chair Derek Yung, Chairman of Alliance Bernstein Investments Taiwan Ltd.; AmCham Pharmaceutical Committee Co-Chair Lai Li Pang, Managing Director, Merck Sharp & Dohme (I.A.) LLC, TW Branch; and AmCham Advanced Learning Lab Advisor William Zyzo, Advisor, Training Director, Z&A Knowledge Solutions

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