Emerging Asian countries were the major drivers of the global economic recovery. Not surprisingly, the vast majority of their stock markets provided blossoming returns in 2010. Yet, with the increase in influx of money and inflation pressures, the majority of Asian countries have certain difficulties with tightening their monetary policy. China has just increased the bank reserve requirement ratio to 19.5%, in addition to the three interest rate increases since October of last year. The market expects the Chinese interest rate hikes to accelerate in the near future as these monetary measures in coupe with other administrative actions are failing to tame the inflation and money supply. India increased its interest rates seven times since the beginning of 2010, but managed to cool the industrial production to a mere 1.6% in December with inflation remaining at 9.5% in the same month. Indonesia, Philippines and other Asian developing economies face similar problems of inflation, excess money supply and overheating economy.
These economic issues in Asian countries present a question for an investor: Which countries are capable of implementing a monetary policy to balance out the inflation and economic growth? Oxenuk Management, LLC has reviewed the recent developments and macroeconomic perspectives of the region and come up with the distinctive candidate. Oxenuk Management LLC recommends participating in Asian economic growth by investing in Australia, a choice that will help avoid the majority of inflation and inadequate monetary policy risks.
Australia offers diversification in two dimensions to investors looking to invest in Asia-Pacific region. First, Australia is a developed country and has a sound, and most importantly, consistent recent history and future outlook for growth. Second, its excellent resource base and crucial geopolitical location give the country exposure to the whole emerging Asian region.