Mar

23

Financial giant HSBC reports that investors are pulling out funds from Asia Pacific’s emerging markets to divert these to markets in North America, as confidence in western economies returns.

HSBC’s latest survey, global fund managers have become more bullish on North American equities markets in the first quarter of 2011. The bank said 100 percent of fund managers have seen renewed optimism in the US economy.

Concerns on inflation in Asia-Pacific speed up this process and further exacerbated by China’s ongoing austerity measures that could stunt economic growth.

Also according to accounting and consulting organization BDO USA survey, 35 percent of the one-hundred chief financial officers (CFOs) of the companies surveyed indicated that their firms are currently outsourcing services or manufacturing outside the U.S. — down from a high of 62 percent in 2009, and a slight decline from the 37 percent decline in 2010.

The study also found that of the companies who are not currently outsourcing (65 percent), the majority would not consider outsourcing too far from home (58 percent), either choosing the U.S. (25 percent), Canada (13 percent), or indicating no plans to outsource at all (20 percent).

Tech companies turned to outsourcing in 2009 in order to reduce operating costs and ride out the recession. Since then, we’ve seen a marked decrease as companies recover and look to create jobs and growth close to home.

The CFOs indicated that while they are concerned about some U.S. regulations that may change taxes, they don’t expect jobs to head overseas any time soon.

Asian markets still remain remain attractive to many investors, with the solid fundamentals of most economies in the region and the financial strength of corporate issuers.

The general view remains positive as Asia-Pacific will definitely contribute long-term global economic recovery.

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