Shenzhen, China-based broker-dealer, Fox Capital Partners has advised institutional clients that global fund selling of emerging market equities has created a large number of opportunities to acquire blue chip Asian stocks at significantly discounted prices.

Large funds like BlackRock Inc and others have been net sellers of stocks in Indonesia, South Korea, Thailand and Malaysia as the US Federal Reserve ostensibly prepares to raise interest rates for the first time in nearly 10 years.

“The equity funds feel that the Fed is on the first step towards a normalization of monetary policy, whatever ‘normal’ is,” said Gordon Li-Chao, chief economist at Fox Capital Partners. “Consequently, they’re selling stocks because they think they’re heading lower but we don’t think the rate hikes will go any further than the token 25 basis points the Fed could deliver later this month. We think EM equities are set for a sharp rebound.”

Li-Chao dismissed concerns over corporate indebtedness in US dollars and said that the majority of blue chips in the EM bourses were well capitalized with low debt and strong revenues.

“There are some who believe that a rate hike will cause difficulty for companies that have borrowed in US dollars but we don’t see any evidence of that. We are, after all, only talking about 25 basis points,” he added.

Fox Capital Partners has reduced the odds of a US rate hike to 53% following the US ISM manufacturing data released last week which showed further contraction in a sector of the US economy responsible for 12% of gross domestic product.

About Fox Capital Partners
Fox Capital Partners is a successful, independent investment management practice established in Shenzhen City, China and headquartered in Shenzhen. Our highly-qualified professionals advise on a wide array of wealth accrual, preservation and portfolio management solutions aimed at affluent individuals and families in Asia and elsewhere.