随着美联储隔夜正式宣布降息50基点，The Fed has signaled a more accommodative stance toward the central banks of emerging markets that have not yet begun to cut interest rates, as there is more room for central banks in Southeast Asia to ease monetary policy, and local market prospects are generally bullish.
The Fed's first significant interest rate cut in four years sends a signal of easing to central banks in emerging market countries, with optimistic prospects for the Southeast Asian market.
A central bank interest rate cut typically leads to a decline in the local currency and presents challenges for central banks in emerging market countries. Starting the easing cycle before the Fed's rate cut may result in currency depreciation, decreased investment attractiveness, increased import prices, and subsequently, inflation.
With the Fed officially announcing a 50 basis point interest rate cut overnight, other central banks that have yet to enter an easing cycle can now confidently join the rate cut club. These central banks are mainly located in Asia, particularly Southeast Asia.
Currently, central banks in Southeast Asian countries are on the edge of an easing cycle.
The Philippines took the lead in cutting interest rates in August, while Indonesia, supported by strong expectations of a Fed rate cut, lowered its key interest rate this Wednesday. JPMorgan predicts that India will cut rates next month, while the central banks of South Korea and Thailand will take action before the end of this year.
Due to the central banks in Southeast Asia having more room to relax monetary policies, the local market outlook is generally bullish.
Joevin Teo Chin-Ker, Investment Director at Orient Securities Singapore, holds a bullish view on the bond and currency markets in Southeast Asia:
The actual interest rates in Southeast Asian countries are higher than a year ago, and there is further room for interest rate cuts, which is a bullish news for the local bond market.
In the past two months, fund managers have continued to increase their shareholdings in sovereign bonds of Thailand, Indonesia, and Malaysia. Over the past three months, they have been net buyers of Indonesian, Malaysian, and Philippine stocks. The inflow of these funds has helped Southeast Asian currencies become the best-performing currencies in emerging markets this quarter.
In addition, the valuation advantages and low labor costs in Southeast Asia provide positive prospects for the local market.
Editor/ping