SINGAPORE: Goldman Sachs Asset Management says the volatility saturating global stock markets this year isn’t unusual and provides a window to buy selective emerging-market assets.
“This is the return to normality,” James Ashley, head of international market strategy, said at a briefing in Singapore. “We think emerging markets are being oversold. We would see this as an attractive entry opportunity.”
A challenging year for financial markets took a turn for the worse in November as volatility erupted from New York to Athens. While global equities have recouped some of their losses in recent days, markets such as China, Hong Kong and South Korea have all dropped into bear territory due to concern over slowing growth, sliding oil prices and a U.S.-China trade war.
Goldman Asset is modestly overweight China and favors Indian and Indonesian equities, London-based Ashley said.
“The key message for 2019 is we prefer equities to credit, we prefer credit to developed-market fixed income, and we prefer emerging markets to developed markets,” he said.
The money manager isn’t alone in saying it may be time to buy. Aberdeen Standard Investments bought U.S. stocks earlier this month, while Allianz Global Investors is snapping up emerging-market debt and selective U.K., Chinese and European equities. Northcape Capital Ltd. sees buying opportunities.
Others are less optimistic. JPMorgan Chase & Co.’s multi-asset team has boosted cash levels and Treasury holdings at the expense of shares to reduce risk.
This isn’t the time to go defensive, Goldman Asset’s Ashley said. “The environment over the next couple of years will be more challenging than it has been in the recent past -- lower returns, higher risk -- but that doesn’t mean it’s the time to go into cash.’’ - Bloomberg