KUALA LUMPUR: ASEAN economies’ balance sheets have held up “very well” amid the enduring pressures from the United States (US) economic trend and interest rate hike for the last two years, said a portfolio manager.
Eastspring Investments Asia equities portfolio manager Sundeep Bihani said ASEAN would still feel the pressure of the lagged effect of the liquidity tightening happening in the US and the US dollar being strong and interest rates high this year.
“But as these US rates start to fall, ASEAN should benefit in a significant way, it is during the second half of this year or next year, but dependent on several issues going on in the US.
“Whenever this happens, the ASEAN economy should shine because the world will start looking at the economies, the balance sheets, and the US by then will start to see a little fading away of interest,” Bihani said in a webinar titled “Beyond the boardroom: Positioning for Asia’s longer-term re-rating”, yesterday.
He said that this year, the focus and opportunities are still there in ASEAN and he expects more next year.
Meanwhile, Eastspring Investments head of equities for China Michelle Qi said the Chinese market appears to have bottomed, especially after the liquidity sell-off at the end of January.
“Even now, if we are looking at the valuation of China equities relative to emerging markets, the discount is nearly at an all-time low. Relative or absolute, we have already all hit the bottom.
“And looking at the economy, I think the only thing people still worry about is the property sector. The April new home sales are slow but on the other hand, I think if you are looking at the recent industrial numbers, it looks like the structural change is happening,” Qi said.
She said the Chinese economy is slowly changing from property investment-driven towards more manufacturing sector-driven thanks to the strong global economy that enabled Chinese manufacturers to export globally and to benefit from the global recovery.– BERNAMA
