US s commitment to support growth may push Asian stocks higher

Asian shares are expected to open higher today after positive offshore leads. The commitment by the U.S. Federal Reserve to continue supporting growth comes as no real surprise and risk tolerance is back on the table, albeit only modestly in some markets.

More money printing out of the U.S. brings with it opportunities but it also causes imbalances for emerging economies like China for example, where inflation has been an issue. The balancing act remains challenging.

Asian markets are still focused on Friday’s U.S. jobs numbers and the outcome of European debt discussions – both essential as key Asian export customers.

One key Asian corporate story out this morning is the performance of ANZ Bank – an Australian listed bank which sought to diversify across Asia over the past few years. The result is in line with the August trading update so no real surprises.

The key takeaway for us is the Asian growth strategy starting to deliver strong results. Asia Pacific Europe & America (APEA) underlying profit was 20% higher in US$ terms despite more challenging market conditions. ANZ’s return on equity of 16% is a lot higher than other Asian peers and the stock will continue to find favour with a wide regional investor base. Arrears are falling overall when compared to March this year, with total loans past due 90 days down 6% to just over $1.8bn.

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