Some Asian Stocks Could Be Poised To Pounce

Some Asian Stocks Could Be Poised To Pounce

almost 4 years ago2 mins

Mentioned in story

With the Chinese economy exhibiting early signs of a rebound on Tuesday, several big investors’ thoughts are already turning to how a recovery from the coronavirus might affect stocks in Asia 😋

What does this mean?

Many Asian markets have, like the rest of the world, suffered their worst quarter since at least the last financial crisis. But the mini-manufacturing revival in China – where the virus first emerged – makes CMC Markets think the country’s government will soon focus on reviving consumer activity as well. That’d likely boost retail and consumer goods companies operating there, as well as tech firms working in 5G, gaming, and cloud computing.

Article Image

Stocks look shakier where the coronavirus is less far advanced. The Singaporean economy is concentrated on exports and tourism – and those industries are unlikely to return to normal anytime soon. Aizawa Securities also expects Japanese stocks to fall further if a full lockdown is imposed there – although there may be a few long-termist exceptions, such as Toyota and Takeda Pharmaceutical.

Why should I care?

While Indian and Australian stock markets posted their worst quarters ever, the good news for Asia-focused investors is that the average company share price across the continent is now just 10.6 times next year’s earnings. That’s the lowest “price-to-earnings” valuation since 2012 – and it could present a buying opportunity, at least in certain countries 👀

The Philippines, for example, has a way to go to beat the virus – but UBS sees companies providing grocery and telecoms services there doing well, with banks also expected to quickly bounce back once things normalize.

On the other hand, Citigroup sees volatility persisting in India, where the government may struggle to look after its 1.4 billion population and smaller stocks could suffer cash shortages. And even China isn’t out of the woods yet. Investor trading on the country’s stock exchanges has fallen 60% recently – which could lead to a rapid reversal of companies’ fortunes…

Article Image


All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG