Why are Asian markets so cheap?
Markets have been unusually calm in Asia, despite a series of sharp sell-offs in recent weeks.
The Asian stock market has been trading near record highs for most of 2017, and there has been a steady flow of funds into Asian equities.
The S&P 500 index, for example, rose 2.7 percent last week.
In China, the benchmark Shanghai Composite has soared 10.3 percent in 2017.
But a rally in the index last week led to a sharp selloff on Friday.
“It’s a very volatile market.
There are some risks, but there is also a lot of confidence,” said Matthew Rimmer, a professor of macroeconomics at George Mason University in Fairfax, Virginia.”
The Chinese economy is growing at a very slow pace and the central bank has been very supportive of the economy.””
It has been an exceptionally good year for the stock market,” he added.
The stock market rally in Asia comes as a global recession and a weak US economy has taken a toll on the global economy.
“We’ve had a lot more volatility in the stock markets than we’ve had in the US,” Rimmer said.
Investors in Asian markets were particularly keen on Chinese equities, with many citing the country’s rising stock market as a reason to buy.
The Shanghai Composite rose 3.7% last week, its strongest performance since mid-2017.
It has also seen its biggest one-day rally since September, rising 7.2% this week.
Rimmer said it was the most optimistic indicator for the future.
“They are going to see a big rebound in the economy in the first quarter of 2018, and it’s going to be a big boost to China’s economy,” he said.
The global economy has also been buffeted by uncertainty over the upcoming elections in the United States, and the political crisis in Russia, which has seen President Vladimir Putin step back from the Kremlin’s agenda.
“I think there are more investors who are now willing to buy China because of what’s happening in the world,” Rimmers said.
“And it’s also an opportunity for them to take some risks.
You can see that in the S&s.”
Ahead of the Asian market rally, a report from Barclays showed China’s stock market had seen a massive jump in 2017, from a peak of 6.5% in February to nearly 15% today.
In its latest research note, the bank said the recent rally had been driven by “a number of factors”, including the government’s policy changes, but also the Chinese stock market’s strength.
“This surge is particularly noteworthy given that China’s GDP growth is already in the double digits and is projected to continue to expand,” the note read.
“As a result, China’s government has already managed to reduce the countrys deficit by more than 2.5 trillion yuan ($330 billion) since the beginning of 2018.”
China has managed to create a significant amount of capital in the form of state-owned enterprises, which have also increased demand for assets like assets such as real estate.