Asia’s leading investors are continuing to pull back on their riskier assets as global economic concerns worsen.
Sovereign wealth funds and institutional investors, with control of more than $1 trillion, have minimized investments in both stocks and bonds and begun boosting their cash resources.
According to Barry Bosworth of the Brooklyn Institution, the change “reflects a growing perception that the problems in Europe and the U.S. will not be resolved any time soon. The risks of a large negative event are too large.”
According to MB.com.ph, BlackRock’s Terrence Keeley said “officials at sovereign-wealth funds are nervous about the outcome of the presidential election in November and its impact on future budget negotiations” as well. Other factors boosting investor concerns include the upcoming power change in China and stunted growth.
Ng Kok Song, Chief Investment Officer of GIC added: “Due to heightened uncertainty in global markets, we allowed the cash inflow from investment income and fund injection to accumulate during the year in preparation for better investment opportunities.”
Keeley explained that sovereign wealth funds are under the impression that “there will be a number of strategic opportunities that they would be best prepared to exploit with cash on hand.”