Insto investors focused on liquidity

17 November 2016
| By Jassmyn |
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More than 90 per cent of institutional investors in the Asia-Pacific (APAC) region believe current market liquidity conditions have impacted their investment management strategy, according to a report.

The report from State Street Corporation in partnership with the Alternative Investment Management Association (AIMA) said 52 per cent of those investors believed decreased market liquidity was a secular shift that required a new strategic approach in order to succeed in a new and complex environment.

State Street global market business in APAC head, Colin Zhong, said: "Although we are not currently seeing a shortage of liquidity in APAC, conditions in developed markets may result in a knock-on effect on our region, as APAC financial institutions with US and European operations are impacted by post-crisis regulatory reforms in those markets".

"This has prompted institutional investors to renew their focus on liquidity management," he said.

Zhong said increased regulation and the pressure to manage costs had significantly changed market liquidity conditions.

"This is causing many players in the investment industry to think about the fundamentals: what roles they play, where to invest, and how they transact their business," Zhong said.

"With liquidity likely to remain at the front of investors' minds for years to come, now is the time to find the strategies, tools, and solutions that will make a sustainable difference to the new investment climate."

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