The Business Times Podcasts S2E24: Silver surges, the won sinks and markets recalculate
Dec 12, 2025
Vikas Pershad, a portfolio manager for APAC equities at M&G Investments, dives into the latest market shifts. He discusses the Fed's hawkish cut and its future implications for Asia's neutral rates. Silver’s rise is linked to industrial demand from green technologies, while Korea navigates a weak won despite booming equities. The geopolitical impact of Nvidia's new chips for China is explored, along with the daunting challenges in China’s property market, which may not see a quick recovery.
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Fed's Hawkish Cut Raises The New Baseline
- The Fed executed a "hawkish cut" by lowering rates but signalling only one cut next year.
- This raises the floor for the cost of capital and keeps the era of very cheap money in the rearview mirror.
Neutral Rate Likely Shifted Up To 3.5%
- Neutral rates have likely risen from around 2.5% to near 3.5% due to structural factors like AI investment and deficits.
- A higher neutral rate means businesses must clear a higher hurdle rate and asset prices will be affected globally.
Silver's Rally Driven By Industrial Demand
- Silver's rally reflects industrial demand from green and digital technologies, not just safe-haven buying.
- A multi-year supply deficit and falling stockpiles suggest structural, not merely speculative, support for higher prices.