THE subprime crisis in the US will not cause its economy to go into recession, and neither will Asian economies be greatly affected by it, says an expert in fund management.
Prudential Fund Management Services investment marketing head Robert Roundtree foresees no doom or gloom from the problem.
"Only the credit markets are talking about it when others in the equity markets, economists and corporates do not think so," he said in a media briefing in Kuala Lumpur yesterday.
Roundtree said from the figures he had seen, the financial systems worldwide are set to weather the credit crisis."US corporate sheets are generally strong, its corporate new issues remain at record-low levels, and Asian and European corporations have seen significant restructuring," he said.
He added that globally, companies have enough cash hence reducing the need to borrow, and in Asia, money growth is generally exceeding nominal gross domestic produduct growth.
"Even if bank lending freezes, there seems plenty of buffer. It is obvious that corporations are well positioned globally, so where is the problem?" asked Roundtree, who is based in Singapore.
He also said that despite the "credit crunch" factors, growth forecasts for Asia have been edging higher, noting that the region's long-term growth is increasingly driven by rising domestic demand.
Roundtree also noted that for Asia, it is no longer the case of when the US sneezes, the region catches a cold, but China's state of economy has more impact on Asia now.
He also said that in Asia, the equity markets are still relatively cheap, especially in India, the favourite of foreign investors."Malaysia is cheap too but not as cheap as India. So it is not about the weakness of the Malaysian market in attracting foreign money but more a strength of another market."
Roundtree believes that domestic investors here should take advantage of the cheap local market and start accumulating good stocks.
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