Posted inIndustry viewsAsset Class in Focus

Asian equities defy Trump

Asian equities have given the US the finger. Despite Trump rejecting the TPP, the Asia stock market, as measured by the MSCI Asia ex Japan, was up 3.8% in sterling terms in January – a much better start to the year than all other major markets bar Latin America.

It is also home to a massive young and increasingly educated workforce. Earlier this week, Dyson announced that it is opening a $400m research centre in Singapore. While we have a dwindling number of engineers in the UK, 40% of graduates in Singapore have studied science or engineering.

A strong US dollar is a concern, but not a new one. And, with The Economist having triggered the ‘curse of the cover page’ in December, with its talk of the “Mighty Dollar”, perhaps that will become less of a problem in the coming months anyway.

So while the Asian stock market has obviously come some ways from its lows, sentiment is still very negative and therefore valuations are still attractive. Longer term, the growth potential relative to western markets is significant but tomorrow’s winners won’t be those of today. It’s a market where active managers are a must.


Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. Clive’s views are his own and do not necessarily reflect those of FSA.

 

Part of the Mark Allen Group.