Latest news with #GlobalMarketOutlook
Biz Bahrain
3 days ago
- Business
- Biz Bahrain
Standard Chartered: Weak Dollar to Unlock Opportunities in Emerging Markets and Global Equities
Standard Chartered announced its Global Market Outlook for the second half of 2025, projecting a constructive but volatile environment for investors worldwide. The Bank sees significant implications for Middle East investors, driven by expectations of a softer US dollar, resilient global equity markets and improving prospects for emerging-market assets. The report highlights that Global macro conditions remain mixed. In the United States, growth continues to be supported by resilient consumption and fiscal stimulus, though trade and policy uncertainty may temper momentum in the second half of the year. In Europe, fiscal easing increasingly offers support, but structural challenges persist while China's outlook is stabilising on the back of targeted stimulus and improving retail activity. Meanwhile, growth in India and ASEAN is expected to remain well-supported. Against this backdrop, the report outlines an investment strategy reflecting evolving risks and opportunities. We expect the US dollar to weaken over the next 6 to 12 months and have accordingly upgraded Asia (ex-Japan) equities and Emerging Market (EM) local-currency bonds to Overweight. Global equities also remain an Overweight position across portfolios, supported by healthy earnings, easing trade tensions, and controlled inflation (so far). Commenting on the report, Dr. Boutros Klink, CEO, Standard Chartered Bahrain, said: 'As global markets transition into a new phase, investors in Bahrain and the wider Middle East are well-positioned to capitalise on emerging opportunities. A weaker dollar historically supports returns across risk assets, particularly in emerging markets, which have long been core components of regional portfolios.' He added: 'This outlook underscores a critical moment for investors in the region. As the global environment adjusts to weak dollar dynamics, shifting trade policies, and diverging central bank actions, investors in our region have an opportunity to reposition portfolios with greater international diversification. Asset classes such as emerging market bonds and equities across major regions (including non-US equities) are well-placed to help investors navigate volatility, capture income, and enhance portfolio resilience in today's shifting landscape.' In line with these themes, the report maintains a preference for USD-denominated bonds in the 5–7-year maturity range, citing them as the most attractive in terms of risk-adjusted returns, particularly as yields begin to ease from current levels. Meanwhile, Developed Market Investment Grade corporate bonds have been downgraded to Underweight due to tight yield premiums and slower inflows. Alternative investments are also in focus, with the Bank highlighting gold as a core allocation, supported by strong central bank demand and its role as a diversifier when bonds offer less downside protection.
The Star
6 days ago
- Business
- The Star
Upside potential for ringgit
PETALING JAYA: The ringgit is likely to close at RM4.10 against the US dollar by the end of this year and RM4 by the end of 2026, amid a continuous softening of the US dollar and portfolio inflows. Malayan Banking Bhd (Maybank) head of foreign-exchange (forex) research Saktiandi Supaat said the ringgit's performance in 2025 so far has been supported by a broad decline in the greenback, which stemmed from fading US 'exceptionalism' and tariff-driven concerns on US growth. He noted that Federal Reserve rate cuts had also been priced in, which in turn made global investors shift away from the United States. 'The broad decline in the dollar will still be on track for the next six months and most of 2026. Generally, tariffs will be the key theme on top of others,' he said at Maybank Investment Bank's second half of 2025 (2H25) Market Outlook virtual media briefing yesterday. Currently, US$1 equals to around RM4.25. He reckoned that the ringgit was still fairly valued at this stage, with upside potential. Ongoing domestic initiatives such as government-linked companies forex conversions, resident investor programmes and promoting the ringgit in cross-border trade are steps in the right direction, he added. Saktiandi also noted that foreign currency deposits in Malaysia had grown, particularly among corporates. Meanwhile, Standard Chartered, which also held its second-half market outlook briefing yesterday, expects the ringgit to trade within a narrow range of 4.20 to 4.30 against the US dollar over the next 12 months, also supported by a broadly weak greenback. Senior investment strategist Yap Fook Hien said the US dollar's weakness had largely been priced in, and the currency is expected to stay soft – at least for the next 12 months. 'Most of the weakening has already happened and we do not expect a bounce back. At the moment, our view is that at least for the next 12 months, it will be weak,' he said at the bank's 2H25 Global Market Outlook briefing. 'But also important to note, we're not looking at a collapse of the US dollar.' He noted that the US Dollar Index (DXY), which has hovered between 100 and 110 since 2022, slipped below 100 in April amid 'Liberation Day' tariff concerns, and now trades around 98. Standard Chartered's 12-month target for the DXY is 96. On the local economy, Maybank group chief economist Suhaimi Ilias said he was maintaining Malaysia's 2025 real gross domestic product growth forecast at 4.1%. It has been revised downwards twice this year from the original 4.9% as a result of the reciprocal tariff announcement in April and lower-than-expected first-quarter growth. The prolonged uncertainties plus overhangs in US trade policy and tariff actions, as well as the outcome of Malaysia's negotiations with the United States will continue to be in focus, he said. 'There is still resilience in domestic demand, especially consumer spending and investment,' he said, adding that the country's investment upcycle appeared intact. Head of equity research Lim Sue Lin said Maybank's year-end FBM KLCI target remained at 1,660 points, 14.4 times the 2026 price earnings ratio. 'Three sector thematics to explore for the rest of 2025 are plantations, utilities/renewable energy and ports,' Lim said. Although 'neutral' on banks, Lim noted that they remained a 'crucial driver' in terms of the direction of the stock market benchmark index. Lim is also positive on the consumer, healthcare and real estate investment trust sectors. 'The (newly imposed) sales and service tax will only affect the consumer discretionary sector,' she said, adding that she remained positive on consumer staples. At its briefing, Standard Chartered Malaysia head of managed investments and advisory Ng Shin Seong added that the narrowing interest rate gap between the United States and Malaysia could support the ringgit, although 'there's just a couple more percent in our 12-month view'. 'There has been a pre-emptive cut in Malaysia's overnight policy rate, and the US Federal Reserve is expected to cut rates further,' he said. Despite market uncertainty from US trade tensions, Ng said the macroeconomic data for Malaysia remained resilient. 'Once uncertainties are alleviated, that could help the market. Based on the hard data, the country is doing okay.' Yap said a weak US dollar typically supports equities and favours non-US assets, prompting the bank to upgrade its view on emerging market local currency bonds and Asia ex-Japan equities. 'We expect a soft landing in the United States, which is positive for global equities, but the tilt is towards non-US assets,' he said. 'Asia ex-Japan valuations are attractive, and we prefer China and South Korea due to ongoing stimulus and artificial intelligence developments.' Within China, Yap said Standard Chartered adopted a barbell strategy, favouring high-dividend state-owned enterprises for stability and technology stocks for growth. In South Korea, he said improving corporate governance and fiscal stimulus are expected to attract more inflows. As for Asean, Yap said the region remained defensive and resilient, but may underperform in a strong global rally. 'Asean tends to outperform in weaker markets. At the moment, we prefer other markets for outperformance potential,' he said. He added that gold and alternative assets remained relevant in a diversified portfolio, especially amid global uncertainties, while reiterating that the US dollar remained the world's most liquid currency despite its weakness. On tariff developments, Yap said further delays are likely, given the complexity of reaching consensus across multiple countries. 'It's quite likely you'll see a bit more postponement further down the road because to get agreement from so many countries is actually very difficult. Each country has its own specific tariff, and how they calculate that number can be a mystery,' he said.
The Sun
6 days ago
- Business
- The Sun
StanChart expects US dollar to weaken in H2
KUALA LUMPUR: The US dollar is expected to weaken in the next six to 12 months, and Standard Chartered Wealth Solutions Chief Investment Office (CIO) outlines a constructive, albeit volatile second half of 2025 in its recently published Global Market Outlook report. The bank views the weakening greenback outlook as a key market driver alongside an anticipated policy easing and supportive global conditions. Against this backdrop, the bank has identified three key themes for investors to consider during the second half of the year, namely an overweight position in global equities, with a tilt towards Asia ex-Japan. The bank also highlighted a preference for US dollar bonds with maturities of 5 to 7 years, as well as emerging market (EM) local currency bonds, citing the recent weakness of the US dollar as a key factor driving this strategy. Gold and alternative investment strategies are seen as attractive options for enhancing portfolio diversification. Taking into consideration the end of US' 90-day tariff pause in July, as well as global geopolitical conflicts, the bank also identified several risks that merit close attention and will most likely result in temporary volatility. Standard Chartered noted that key risks to the global economic outlook include a sustained rise in trade tariffs, a sharp increase in oil prices driven by geopolitical events, and a sudden decline in US economic data that could point toward a potential recession. Standard Chartered Malaysia head of wealth and retail banking Harmander Mahal said the second quarter marked a pivotal moment for investors. 'Despite ongoing global trade shifts and geopolitical tensions, global equities remained robust, rising approximately 8 -10% quarter-to-date. 'This reflects sustained investor confidence and a re-acceleration in risk appetite, particularly across Asia, where emerging markets benefited from stronger capital inflows and currency tailwinds. 'Malaysia continues to demonstrate resilience amid global uncertainty, with our 2025 growth forecast maintained at 4.2% and the ringgit emerging as the region's better-performing currencies against the US dollar – signalling strong investment sentiment,' he said. In addition to its leadership role as Asean Chair 2025, Harmander said Malaysia is well-positioned to unlock further growth opportunities based on the bank's outlook for the year, as structural reforms take shape and strategic initiatives, such as the Special Economic Zones gain momentum.
Business Insider
16-07-2025
- Business
- Business Insider
Standard Chartered: Weak dollar to unlock opportunities in emerging markets and global equities
10 July 2025, Nairobi, Kenya: Standard Chartered announced today its Global Market Outlook for the second half of 2025, projecting a constructive but volatile environment for investors worldwide. The Bank sees significant implications for emerging markets investors including Africa, driven by expectations of a softer US dollar, resilient global equity markets and improving prospects for emerging-market assets. The report highlights that Global macro conditions remain mixed. In the United States, growth continues to be supported by resilient consumption and fiscal stimulus, though trade and policy uncertainty may temper momentum in the second half of the year. In Europe, fiscal easing increasingly offers support, but structural challenges persist while China's outlook is stabilising on the back of targeted stimulus and improving retail activity. Meanwhile, growth in India and ASEAN is expected to remain well-supported. Against this backdrop, the report outlines an investment strategy reflecting evolving risks and opportunities. We expect the US dollar to weaken over the next 6 to 12 months and have accordingly upgraded Asia (ex-Japan) equities and Emerging Market (EM) local-currency bonds to Overweight. Global equities also remain an Overweight position across portfolios, supported by healthy earnings, easing trade tensions, and controlled inflation (so far). Based on the report, 'Aas global markets transition into a new phase, emerging markets investors are well-positioned to capitalise on emerging opportunities. A weaker dollar historically supports returns across risk assets, particularly in emerging markets, which have long been core components of regional portfolios. Manpreet Gill, Chief Investment Officer of Africa, Middle East and Europe, Standard Chartered said: ' This outlook underscores a critical moment for investors in the region. As the global environment adjusts to weak dollar dynamics, shifting trade policies, and diverging central bank actions, investors in the emerging markets have an opportunity to reposition portfolios with greater international diversification. Asset classes such as emerging market bonds and equities across major regions (including non-US equities) are well-placed to help investors navigate volatility, capture income, and enhance portfolio resilience in today's shifting landscape.' In line with these themes, the report maintains a preference for USD-denominated bonds in the 5–7-year maturity range, citing them as the most attractive in terms of risk-adjusted returns, particularly as yields begin to ease from current levels. Meanwhile, Developed Market Investment Grade corporate bonds have been downgraded to Underweight due to tight yield premiums and slower inflows. Alternative investments are also in focus, with the Bank highlighting gold as a core allocation, supported by strong central bank demand and its role as a diversifier when bonds offer less downside protection.
Khaleej Times
02-07-2025
- Business
- Khaleej Times
Weak dollar to unlock opportunities in emerging markets and global equities
With the US dollar at multi-year lows and expected to weaken further over the next six to 12 months, prospects are improving for emerging-market assets, a report showed on Wednesday. Standard Chartered's Global Market Outlook for the second half of 2025 projects a constructive but volatile environment for investors worldwide. In the United States, growth continues to be supported by resilient consumption and fiscal stimulus, though trade and policy uncertainty may temper momentum in the second half of the year. In Europe, fiscal easing increasingly offers support, but structural challenges persist while China's outlook is stabilising on the back of targeted stimulus and improving retail activity. Meanwhile, growth in India and ASEAN is expected to remain well-supported. 'We expect the US dollar to weaken over the next 6 to 12 months and have accordingly upgraded Asia (ex-Japan) equities and Emerging Market (EM) local-currency bonds to Overweight. Global equities also remain an overweight position across portfolios, supported by healthy earnings, easing trade tensions, and controlled inflation (so far),' the report said. Commenting on the report, Ayesha Abbas, managing director and head of affluent and wealth solutions, Europe, Middle East and Africa, and UAE at Standard Chartered, said: 'As global markets transition into a new phase, Middle East investors are well-positioned to capitalise on emerging opportunities. A weaker dollar historically supports returns across risk assets, particularly in emerging markets, which have long been core components of regional portfolios.' She added: 'This outlook underscores a critical moment for investors in the region. As the global environment adjusts to weak dollar dynamics, shifting trade policies, and diverging central bank actions, investors in the Middle East have an opportunity to reposition portfolios with greater international diversification. Asset classes such as emerging market bonds and equities across major regions (including non-US equities) are well-placed to help investors navigate volatility, capture income, and enhance portfolio resilience in today's shifting landscape.' In line with these themes, the report maintains a preference for USD-denominated bonds in the five to seven-year maturity range, citing them as the most attractive in terms of risk-adjusted returns, particularly as yields begin to ease from current levels. Meanwhile, developed market investment grade corporate bonds have been downgraded to Underweight due to tight yield premiums and slower inflows. Alternative investments are also in focus, with the bank highlighting gold as a core allocation, supported by strong central bank demand and its role as a diversifier when bonds offer less downside protection.
