Its Goldilocks for Asian economies, right time to add Asian stocks to portfolio!
Good morning investors, there is a good news coming up from the Asian part of our world. On the basis of a research conducted by Morgan Stanley, there is enough evidence to state that the Asian economies are set for a rebound. Yes you might be wondering how, read on.
In 2021, the four robust Asian countries – India, China, Singapore and Indonesia are set for an economic rebound, that shall be much more effective than just an economic revival.
These economies were trending below the benchmarks, and have been able to manage the pandemic much better than some other major economies. This mean that there was always stability in the stocks, erring on the side of caution, which is good for the investors as the alpha on the Asian stocks is understated and thus a good “buy”, if we were to speak in plain investor terminology.
Furthermore, this phase of the Asian stocks is here to stay, as an equilibrium shall set in where the inflation, deflation and growth are all in harmony with political stability in place already.
Just 2 days back the Indian Prime Minister had indicated that the COVID-19 vaccine is just around the corner and the distribution strategy is also in place, this indication resulted in the stock markets responding with cheer. Indian benchmark indices, both the BSE and NSE have been on a roll for a couple of months, with the declines being seen only due to profit booking, the fundamentals being strong. Thus whatever dip was seen earlier in manufacturing and service sectors due to lockdown and social distancing, are all going to be covered with the vaccine roll out and the Industry segments will mark new peaks on the bourses.
Most of these economies are seeing an uptick in the Capital expenditures by the Government spending route, which will definitely translate into a multiplier effect and shall be seen on the stock indices too.
If you were waiting for the right moment to pick up some Asian stocks for your portfolio, even for additions or for rebalancing, now is the time to enter the Asian markets while the vaccine announcements are still a couple of weeks away. Don’t wait for too long.
The research report is written by Morgan Stanley economists Deyi Tan, Zac Su, Jin Choi and Jonathan Cheung.