Wednesday, February 11, 2015


Mr. Reginald Yu represents the Anvil Business Club (Association of Young Filipino-Chinese Entrepreneurs) in an exclusive, private dialogue with one of the global banking industry's most revered experts in Asia markets, Mr. Hartmut Issel, UBS AG Wealth Management Head of Equity Credit & Macro for the Asia-Pacific, during his short visit to the Philippines.
Speaking with a private audience of less than ten invited guests, the head of Wealth Management Research at UBS – and arguably, one of the world's most esteemed investment analysts – rendered a revealing treatise on the global economic outlook and the performance of key financial markets for 2015, as he discussed how he observed a number of visible divergences between economic regions. Mr. Issel cited how the end of Quantitative easing (QE) – a monetary policy used by a central bank to stimulate an economy when standard monetary policy has become ineffective – and interest rate hikes in the United States would influence the world markets at a time when Europe and Japan have decided to print more money.
He pointed out that, while there is a noticeably slower credit growth trend across the Asia-Pacific Region, the Philippines is still being predicted to be a leader in economic growth forecasts with 6%, second only to China with 6.8% for 2015. The Asia Market expert cautioned, however, that while China's sustained economic growth – which contributes 35% to the world's expected 3.5% global growth in 2015 – continues to be strong, the country's overall debt is mostly constituted by corporate debt – 90% of which are state-owned. To this end, China recently declared a sweeping reform on State-Owned Enterprises (SOE) with the participation of private capital, restructuring or closing unprofitable units, deregulating key industries, and improving incentives for management – in order to stem the growing debt gap.
He debunked the public notion that the global economy is entering a period of cheap oil, citing key economic indicators, such as growing demand for oil, which is projected to increase by 1 million barrels per day each year, as world population grows from 6.8 billion today to 9 billion by 2050.
The concluded his one-hour presentation with his prediction that the world economy can accelerate in 2015, which will be led by the United States. He predicted that Europe will continue to recover from its economic crisis, but at a slower pace. He opined that China's growth is gradually slowing (due to weaker demand for its products and the widening SOE debt), while India (with the new government's fiscal reforms) will gain at a higher speed of growth. Finally, he foretells the strengthening of the US Dollar across the board, while the Philippines stands a good chance of being one of the strongest economies in Asia.
Special thanks should goes to Sharlene Soo of UBS Hong Kong for hosting this exclusive dinner.
UBS is the biggest bank in Switzerland, operating in more than 50 countries with about 63,500 employees globally. It is considered the world's largest manager of private wealth assets with over CHF2.2 trillion in invested assets; and a leading provider of retail banking and commercial banking services in Switzerland.

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