Five reasons why you should get to Asia if you possibly can
As we've noted many times previously, it's not easy to get a job in China or Hong Kong if you're based in London. Even young Chinese are unpopular as long as they've got a London address on their CV.
This doesn't mean you should totally give up on an Asian move. Persistence may pay off long term. In a 112 page report this week Nomura spells out why Asia is ascendant, and offers the following five reasons why Shanghai is set to lead the development of Asia's capital markets.
1) Deregulation
As China internationalises the renminbi over the coming decade, it will open its capital and financial markets. This will require the free flow of capital and a freely floating exchange rate.
As capital controls are lifted, foreign and direct investors will gain more access to China's markets, leading to capital inflows. Financial liberalisation will also lead to asset-price inflation, encouraging further inflows. Meanwhile, the appreciation of the Renimbi will lead to outflows as investors seek to benefit from the appreciating currency.
China's financial and capital markets will need increased depth and sophistication to cope with these changes.
2) Further integration of Asian economies
The continued integration of Asia's economies should lead to increased intra-regional capital flows. Nomura's analysts point out that ASEAN member countries (Singapore, Malaysia, Indonesia, Philippines, Thailand, and Brunei Darussalam) have set a goal of establishing an ASEAN Economic Community by 2015, and that China, Japan, Korea and India have signed separate fair trade agreements with ASEAN countries.
The result is likely to be cross border mergers and increased intra-regional capital flows as companies a) draw their revenues from across Asia, and b) are owned by investors from across Asia.
3) Robust economic growth
More middle and high earners means more assets invested in capital markets, especially equities. Capital markets across Asia should deepen as a result. And institutional investment should expand as consumers engage professionals to manage their funds.
Foreign direct investment should increase as rising incomes prompt Asian consumers to spend more on travel, healthcare and financial services.
4) Greater capital flows from Japan
Japan has US$15trn of household financial assets, and there's considerable scope for investment outflows from Japan to Asia to increase.
5) The developing Islamic financial market
As petro-dollars increase in importance, so does Islamic finance. Malaysia is emerging as
a potentially powerful Islamic financial centre. Singapore and Hong Kong, are also interested in attracting the Islamic finance dollar.
