Market experts are saying that the global economy is doing comparatively better than the past few years. It is following the trends of the previous year where there were cautious signs of growth and free liquidity along with the development of financial market.
The recent global market condition is showing a gradual development although there are dormant risks, which are disturbing investors and market observers worldwide.
The Brighter Sides of Global Financial Investments in 2014
The global picture of financial investments has projected certain interesting growth patterns around the world. Let us have a quick look at the latest trends of the major investments growth:
· Japan's aggressive economic policies have helped them to rise from the recent sloppy market conditions that were affecting the national economy.
A Japanese hedge fund organisation named Nikkei managed to get a hike of 56.7% in their revenues in the year 2013. This was their best performance in 40 years. Market analysts give the credit of this economic up a rise to the Japanese Prime Minister Shinzo Abe because he is the one who took positive steps to shape the total economy of Japan.
· There has been an interesting development in Europe’s stock market in the year 2013. The stock market growth percentage of Ireland made a staggering climb to 33.6% whereas Greece, a relatively small country, managed to get a hike of 28.1%. Market analysts predict that the effects of these market growths will enhance the stock market revenues of 2014.
· At present the US economy looks stable with a consistent rise on the GDP growth of 2.5%. There were major agitations against the government when the tax rates were hiked. But the overall development has eased the impact to a great extent.
There are predictions that the picture of the global growth of financial investments will be sustainable In the year 2014. Perhaps this is the reason for which David Thebault, head of quantitative sales trading at Global Equities, said, “This year (2013) has marked the end of the financial crisis. Now we’re beginning to see recovery in the real economy.”
Although there are good signs of a resurging economy around the world, it is the fact that there are some potential risks that are forcing market observers to raise their eyebrows. There are some factors that might induce the risks of the financial crisis in middle east countries and in parts of South-East Asia.
Potential Risks of Global Financial Investment
· Price Depression- Reduction in wages in countries like Japan has lowered the prices of goods to a great extent because consumers are buying fewerproducts, which is not expected, at all. This might give a rise to deflation which is highly contradictory to market growth.
· Political Imbalances- Political clatters in countries like USA has forced to close down certain financial investment ventures taken up by the government.
· Descending Chinese economy- Although China is considered to be the fastest growing democracy in the world, it has certain laid backs when stock markets are taken into concern. The Shanghai index shows a drop of 6.8%, which is higher than the last year. There are market predictions that China’s growth rate will be around 2 to 3% in the coming years.
· Elections in major countries- Countries like India, Indonesia, South Africa, and Brazil will have their elections this year which can affect the global financial investments to a great extent.
If the overall picture is taken into concern, then financial investments in the current year are supposed to be a favorable option. But investors should keep the risk factors in mind.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Asian Banking & Finance. The author was not remunerated for this article.
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