HSBC Private Bank reduces exposure to Indian stocks and increases allocation to gold.

HSBC Private Bank has downgraded its ratings on emerging Asian stocks and reduced exposure to India, while increasing allocations to gold, cash, and hedge funds due to risks of war in Iran and impact of oil prices. Patrick Ho, Chief Investment Officer for North Asia at the bank, stated that they have reevaluated their allocations to limit excessive risks, citing increased uncertainties from tense Middle East situation, energy security concerns, and changes in global capital flows. The bank is studying which markets or sectors would suffer losses if risk scenarios materialize. Ho's team utilizes a scenario-based risk management model with three potential outcomes: negotiation, escalation, and outcomes in between. He mentioned that their current stance reflects a cautious attitude towards emerging Asian countries, as rising oil prices and a strong US dollar have a "dual negative impact" on markets reliant on energy imports and foreign capital.