AllianceBernstein bullish on MPF returns this year, sees assets tripling in a decade

AllianceBernstein’s Asia-Pacific chief executive Kang Li-xian is optimistic about MPF fund returns this year, arguing Asian equity valuations look reasonable and rising corporate earnings can keep markets climbing.

Why the optimism?

Reasonable valuations, rising earnings. Kang expects global equities to rise in the first half before possibly correcting in the second. The biggest uncertainties this year: heating inflation in emerging markets and the European debt crisis.

How much can MPF assets grow?

Three times in ten years. Kang forecasts Hong Kong’s total MPF assets will triple over the next decade, driven by wage growth and the government’s ongoing reviews of contribution caps. He also notes Hongkongers’ appetite for renminbi investments — MPF could one day include RMB products — and predicts 30% of Hong Kong deposits will be in renminbi within five years.

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