Global economy poised for rebound: Standard Chartered analyst


By Ted Chen, The China Post

TAIPEI, Taiwan — The global economy is expected to experience a stronger and more sustainable recovery in 2013 as it steers away from the policy-driven growth seen last year, a Standard Chartered Bank analyst said at a media briefing yesterday.

Taiwan’s economic growth is forecast to reach 3.9 percent, while the U.S. economy is likely to see a 3-percent growth that is likely to persist until 2014, according to the bank’s Chief Investment Strategist Steve Brice.

For the eurozone, Brice observed that the risk of a new crisis is abating and the single-currency area showing signs of recovery, following the European Central Bank’s announcement of its resolve to keep the euro intact.

“The fighting is coming to an end,” said Brice, as he described the easing of tensions between the European Union and its pillory nations in crisis, as they come to a middle ground on austerity measures. However, Brice expressed concern that profits in European banks may be diluted by the need to issue new shares.

Brice outlined the company’s investment framework for 2013, which recommended investors establish positions in Asian and CNH bonds, in addition to global equities, while reducing holdings in gold and U.S. treasury bonds.

“Investors should not expect the same stellar returns on high yield bonds from last year”, advised Brice.

Equity represents the best value among asset markets, as the dividend yield in most major markets is expected to outperform government and high-yield bonds, said Brice, adding that gems may be picked from the European equities market.