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Preserving Wealth in a Deleveraging Economic Environment

September 14, 2012 - London

In these uncertain times private wealth management in Asia should revolve around safe haven, dollar based riskless assets, says Christian Menegatti, Managing Director & Head of Global Economic Research, Roubini Global Economics, USA. Opportunities for investments should be sought in economies with strong fundamentals, a sound political risk system and governments that allow productivity to grow, he adds.

A speaker at the upcoming marcus evans Private Wealth Management APAC Summit 2012, in Macao, China, 29 - 31 October, Menegatti discusses the expectance of a deleveraging cycle in the global economy and what assets private wealth managers in the region should focus on.

- What are the current fluctuation risks and how should private wealth managers in the APAC region prepare for these?

The main risks at the moment are the uncertainty and volatility caused by the Eurozone across the global economy, the Chinese slowdown that will call for a rebalancing of the economy, a huge fiscal cliff for the US after the presidential elections and the political situation in the Middle East, which could result in a shock towards prices.

In these uncertain times, investors should preserve wealth by being risk averse and seeking safe harbours. Opportunities should be sought in economies that have strong fundamentals, a sound political risk system and governments that allow productivity to grow.

- Should Asian investors prepare for a higher inflationary phase?

Deflation, or rather disinflation is the probable economic scene ahead. A deleveraging cycle is expected in the US government sector and in the banking sectors across the Eurozone. Slower credit supply and growth, and less inflationary pressures will be the result. In a disinflationary/deflationary environment investing in high quality corporates debt and equity, possibly with strong balance sheets, and hard assets is the answer in this disinflationary environment.

- What can be expected from the global currency market?

Surpluses across the emerging world and current account deficit across the advanced world will most likely become smaller. This will result in less appreciating pressures for many surplus currencies and less reserve accumulation for those Central Banks. During the rebalancing process, the dollar will become weaker against Asian currencies and the Euro will have to become weaker to facilitate an adjustment within and outside the Eurozone.

A way to hedge against currency risk is to look for safe haven, dollar based riskless assets. This would ensure a stronger position against the rest of the world as the dollar trading area will continue to exist.

- What further advice can you offer to private wealth managers in Asia?

Private wealth managers should be aware of the risks coming from the Eurozone and look out for opportunities coming from the possible disintegration of Eurozone banks. A lot depends on China but opportunities will move into markets like Indonesia, the Philippines and others. Countries that manage to reduce their dependency on the outcome of the Chinese market will be more flexible and will have strong growth rates. These are the countries that investors need to invest in.

Private Wealth Management APAC Summit 2012

This unique forum will take place at the Venetian Macao Resort Hotel, Macao, China, 29 - 31 October 2012. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The Summit includes visionary presentations and interactive forums on moderating growth markets, safeguarding a portfolio, examining uncertainties in the global economy and constructing an effective family governance system. For more information please send an email to or visit the event website at

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Maria Gregoriou
Journalist, marcus evans, Summits Division
Tel: +357 22 849 400

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