Thursday, March 4, 2010


Buy sovereign risk in Asia?

March 3 (Bloomberg) -- Franklin Templeton Investments, manager of $187 billion of fixed income assets, is buying South Korean and Malaysian bonds on bets currency gains will boost returns as sovereign risk weighs down developed debt markets.

“Growth will be slow in traditional core fixed income markets, but not necessarily other countries,” said New York- based Rob Waldner, Franklin Templeton’s global bond fund manager. “What we’re looking at is opportunities that avoid those core markets.”

Sovereign bonds from Asian countries where currencies will appreciate as central banks raise interest rates are a buy, Waldner said yesterday in a phone interview from Melbourne, where he was visiting clients. Franklin Templeton is buying notes maturing in two years or less to limit exposure to declines in the prices of debt, he said.

But P&C rejoins...

KUALA LUMPUR: Bankers in the Asia-Pacific region perceive there the banking industry is over-regulated while issues including macroeconomic trends and political interference are among the top three threats to the banking sector over the next 12 to 24 months, according to PricewaterhouseCoopers (PwC).

The issues weighing down bankers are the Basel 2 requirements arising from the financial crisis and close economic ties to the West, according to PwC officials at a media briefing on Thursday, March 4.

The Banking Banana Skins 2010 survey results showed the “relatively volatile” equity markets in the region were susceptible to the movement of funds around the world.

The survey also revealed areas of high concern included commodities, especially in resource-rich countries, the sustainability of the market rally, a high dependence on TECHNOLOGY [] and the risks to the environment.

Areas of less concern for those in the Asia-Pacific region were credit risk, the availability of capital and issues of corporate governance.

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