Cathay Conning Asset Management Chief Executive Officer Mark Konyn says we are now in a period of significant economic volatility where government and central bank policy is more difficult to predict.

SHOWS: HONG KONG, CHINA (JANUARY 30, 2015) (REUTERS - ACCESS ALL)

1. SLATE, READING (English): 'HOW WOULD YOU RECOMMEND CLIENTS ALLOCATE THEIR PORTFOLIOS AMID DIFFERENT CENTRAL BANK POLICIES GLOBALLY?'

2. CATHAY CONNING ASSET MANAGEMENT, CHIEF EXECUTIVE OFFICER, MARK KONYN, SAYING:

'Well one thing we are absolutely sure of is that we have entered a period of much more significant volatility and much more difficult to read government and central bank policy. We are entering this period of unpredictability if you like in central bank policy. We have seen a number of central banks take actions which were both unexpected and take that action at times that weren't scheduled. And that is making it much more difficult as asset allocators globally think about where growth is going to emerge. You would expect at this stage of the cycle that for investors to pay up a little bit more for growth but unfortunately that increase in volatility is holding back that asset allocation. If we then turn to your question in terms of what that means for this region, we have seen now ten or eleven weeks consecutive of outflows from emerging markets globally, including this region, with only one or two markets benefiting from a positive flow those being India and the Philippines. I think we are going to see a continuation of that pattern India remains the favoured market, much built upon the expectations of Modi's government and reforms and changes in the economic situation there which I think is so far not disappointing investors and they are being encouraged. It is also a fact that India is standing head and shoulders above other emerging markets and there is still flow into equities given that investors are a little bit more cautious on the basket of emerging markets. India benefits from that as being the one that is attracting flow. So that will continue as we expect, but we have already seen that divergence in policy. Deflation I think in this region is a big theme, particularly in the northern industrialized economies in China, in Korea and in Taiwan to some extent. Certainly in China we have seen a pick-up in exports over the last two months but at the expense of lower export prices in RMB and that is a worrying sign because the Chinese economy is not yet in a position where it can adjust quickly. Normally you would expect to see the services sector picking up the slack but of course there are structural impediments in China to that. So we are still concerned about the growth passage in China and we will be keeping a close eye on policy initiatives. The market is expecting to see some stimulus, we are expecting to see the triple R cut before Chinese New Year. We are also expecting to see rate cuts thereafter. But the big run-up we have had on the market, 40 to 50 percent is cautioning the policy makers there to not get too carried away and encourage that liquidity led rally so that it gets too far ahead of itself and we have already seen one day this year where there was a significant correction which shows you to the extent that that margin trading is having on sentiment and driving prices. So all in all we expect to see a reasonable year for equities in this region but I think as we work our way through this period of increased volatility it is difficult to discern a direction until we get closer to the second quarter.'