08 Feb 2015
(MENAFN) GCC investors have been diversifying their asset allocations in favor of emerging market equities and bonds in the face of very low or negative bond yields, a rising dollar and already high USD equity valuations, said the chief strategist of Swiss private bank Pictet Asset Management Limited, Gulf News reported.
“Recent central bank actions have contributed on high volatility in the markets with sovereign bond yields heading to negative territory. With liquidity remaining high due to cheap money policies adopted by most central banks, equity valuations are high, especially in the US. Emerging markets are attractive in relative terms,” Paolini said.
He added that while inflation is decreasing and growth is rebounding in some of the key global emerging markets such as Mexico, India and the Philippines, equities from these markets look attractive and should serve as a tactical diversification opportunity for investors from the Gulf region.
The strong correlation between oil prices and the GCC markets and highly sentiment driven valuations of these markets call diversification.
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