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HSBC Global Asset Management's Quarterly Outlook: Has The Developed World Gone Ex-Growth?

HSBC Global Asset Management's Quarterly Outlook: Has The Developed World Gone

  PR Newswire

  DUBAI, UAE, May 16, 2013

DUBAI, UAE, May 16, 2013 /PRNewswire/ --

Emerging markets have become the engines of global growth as their global
influence increases, leaving developed markets in their shade, according to
HSBC Global Asset Management.

In its latest IQ (Investment Quarterly) global market outlook, HSBC Global
Asset Management indicates that post-crisis growth is likely to remain subdued
for the next few years as there will be a structural overhang on growth from
developed world leverage and population ageing. Compounding the problem,
monetary policy has lost much of its power to stimulate in this balance-sheet
constrained world and the need for fiscal consolidation will also limit the
policy response.

Specific challenges include the on-going euro zone crisis, US fiscal
adjustment and risks to China's growth outlook.

Philip Poole, Global Head of Macro & Investment Strategy at HSBC Global Asset
Management, says: "The conclusion that the developed world is most likely
locked into low growth for an extended period has far-reaching implications
for developed world monetary policy.

" For central banks , targeting lower inflation seems to be out the window, at
least for now. The focus is on generating growth and employment.

"Meanwhile, emerging economies are likely to grow more rapidly than the
developed world but will also face challenges. Growing pains are likely to
include asset price bubbles from excesses that will inevitably get in the way
from time to time."

Dan Rudd, Regional Head of MENA Wholesale, HSBC Global Asset Management, says:
"The oil producing countries in MENA are continuing to benefit from triple
digit prices in oil, supporting the economic growth and further investment
projects. Phil correctly mentions the concerns of asset price bubbles with
emerging markets but the GCC expansion is comparing very well against its
peers, given the solvency of the local governments and deflation in asset
markets could prove more supportive."

This quarter's Investment Quarterly also examines:

- Long-term investment implications - the trend of bonds out-performing
equities in recent years may be coming to an end, and over the long-term,
given current valuations,  the expectation is equities will once again
comfortably out-perform bonds, which could produce zero or even negative real
returns over the next 10 years;

- Frontier markets - those countries with stock markets that are 'verging on
emerging' status either now or at some point in the future;

- The global FX market - establishing fair value for a currency gives a basis
for forecasting future currency movements, and how, it can be difficult to get
a reliable handle on currency valuations.

Philip Poole commented: "Currencies that look cheap relative to their fair
value adjusted PPP rates include the Indian rupee, the Taiwanese dollar, the
Korean dollar and Malaysian ringgit. Indeed, the US dollar itself looks

"By contrast, some developed market currencies including the Swiss franc, the
Japanese yen, the Australian dollar and the Canadian dollar look expensive."

Investment Risks

The value of investments and any income from them can go down as well as up
and investors may not get back the amount originally invested.  Many expats
are looking to the services of multinational banks as they expand into new
markets, from business credit cards to current accounts . Where overseas
investments are held the rate of currency exchange may also cause the value of
such investments to fluctuate. Investments in emerging markets are by their
nature higher risk and potentially more volatile than those inherent in some
established markets. The views contained in this were correct at the time of
this media release and given in good faith. They are subject to change at any
time and do not constitute investment advice.  


Photo available upon request

Notes to editors:

HSBC in the MENA Region

HSBC is the largest and most widely represented international banking
organisation in the Middle East and North Africa (MENA), with a presence in 14
countries across the region.  HSBC has operations in the United Arab Emirates,
Egypt, Qatar, Oman, Bahrain, Kuwait, Jordan, Lebanon, Pakistan, Algeria and
the Palestinian Autonomous Area. In Saudi Arabia, HSBC is a 40% shareholder of
Saudi British Bank (SABB), and a 49% shareholder of HSBC Saudi Arabia for
investment banking in the Kingdom. In Iraq, HSBC holds a majority shareholding
in Dar Es Salaam Investment Bank. HSBC also maintains a representative office
in Libya.

This presence, the widest reach of any bank in the region, comprises some 295
offices and around 12,000 employees. In the three quarters of the year ending
on 30 September 2012, HSBC in the MENA region made a profit before tax of

HSBC Global Asset Management

HSBC Global Asset Management, the core investment management business of the
HSBC Group, manages assets totalling more than US$428bn. HSBC Global Asset
Management has a worldwide client base of private clients, intermediaries,
corporates and institutions invested in both segregated accounts and pooled
funds. HSBC Global Asset Management fulfils its purpose of connecting these
customers with investment opportunities through an international network of
offices in approximately 30 countries, delivering global capabilities with
local market insight. (All figures as at 31 December 2012). For more
information see

HSBC Holdings plc

HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in
London. The Group serves customers worldwide from around 6,600 offices in 81
countries and territories in Europe, the Asia-Pacific region, North and Latin
America, and the Middle East and North Africa. With assets of US$2,693bn at 31
December 2012, the HSBC Group is one of the world's largest banking and
financial services organisations.

HSBC Global Asset Management should be referred to in full at all times to
avoid confusion with any other financial services firms .

The information contained in this press release does not constitute an offer
or solicitation for, or advice that you should enter into, the purchase or
sale of any security or fund .   Any views expressed are subject to change at
any time.

Contact: Media enquiries to: Farah Farooq, +971-56-6867337, Ahmad Othman, +971-50-3069313,
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