21 its highest daily drop since October 2009

It is the return of "repressed" in Asian emerging markets. Powered through the course of agricultural materials, inflation soaring, denied or obscured, time recalls to the good memory of investors which had relegated this risk in the second plan of their concerns, causing by even a regional correction, perhaps the prelude to more problems. Otherwise pointing of the finger, the quantitative easing of the Federal Reserve would, according to some, one of the leaders of the progression of the "commodities", among other controversial effects.

Strong performance of Asian places in 2010 with a gain of 46, it is the Indonesian stock market that has suffered most from this renewed concerns. Jakarta has thus dropped yesterday 4.21, its highest daily drop since October 2009. Another sign of excitement, the performance of the obligation of State to 10 years in this country jumped 44 basis points, to 8.20. Markets fear that the monetary authorities of the country soon embark on a process of significant monetary tightening and "run" after a runaway inflation of 7. This is not an isolated case.

Indeed, it is evolving on a rate of 5 to 8 in India, China or the Brazil. In the Brazil, inflation is at its fastest pace since 2004, with growth of price of the order of 6 per year. Indeed, during a Conference of the Bank of International Settlements (bis) in Basel, the Governor of the European Central Bank (ECB), Jean-Claude Trichet, noted that "inflationary threats seem a general feature of the emerging economies, that is not necessarily found in developed countries."

Rates rise

The return of inflation, increasing the likelihood of future monetary tightening, and weighed on the conduct of most of the Asian places. The Philippine market has lost 2.14, Bombay gave 2.38 and 2.09 Thailand, then Chinese places surrendered between 1.5 and 2.5. The rate to 10 years in the Malaysia rose by 39 basis points, to 4.01. However, all Asian countries, it is China that remains at the heart of the concerns. And its strength gives a measure of stability throughout the area and Asian markets. But "the risk of significant monetary tightening in China seem low." Despite the increases in the rates of the last quarter, a still surprised, and for the best growth. "In addition, on 4 inflation, 2.5 are related to food, and a rate hike is surely not the solution in this environment, the Government preferring alternatives such as price control", stress strategists of Barclays Capital.

In theory, according to the latter, the best possible configuration for scholarships is an inflation of 1 to 4. When this is the case, actions offer higher yields than gold, commodities, bonds indexed on inflation, the assets that generally protect investors against a skid of prices. Emissions of emerging government bonds indexed on inflation, still relatively marginal, should develop more this year. According to a presentation by HSBC Global Asset Management for institutional meetings of the Edhec, end of 2010, investors should spend 20 of their investments in emerging debt securities indexed to the inflation to improve the performance risk in their portfolio. As growth, inflation in emerging countries spread to Europe and the United States through their imports. In Britain or in the Euro area, inflation is just above the threshold of tolerance of the monetary authorities. Thus, it was for example 2.2 annual rate in December in the euro area, either above the 2 threshold.