Asian institutionals take aggressive stance on volatility

The potential for another systemic meltdown is a clear and present danger given the precarious state of eurozone public finances plus global debt and credit imbalances. But Asian investors are not rushing to buy crash protection. Rather, with implied volatility at persistently high levels versus equity returns, some are now selling it instead. Joti Mangat reports

Are severe volatility and policy paralysis here to stay? Investors certainly face a dizzying array of risks and sources of uncertainty, most of which have been pushed down the priority list by the eurozone sovereign debt crisis. While the latest data suggests the US has dodged a double-dip recession with GDP increasing 2.5% in the third quarter and after European policy-makers finally agreed a stabilisation package in October, Italy is now mired in a sovereign debt crisis and there are a number