Asian Market Emerging Trend

4 June 2022

Dear Fellow Investor.

I just sent in a separate email all of you details of a 10 point CPE course on July 7 by Zoom given by my business partner Martin Wong. For the current trading environment it may be of benefit to those who are short term traders. It also may benefit those of you who wish to participate/ invest  in the emerging trend of Asian markets including China and shifting out of developed markets including the US. 

 

As mentioned in last weeks report, Tong Kooi Ong who maintains an investing column in the Edge has sold the majority of his US shares and bought some high quality China shares. He feels that there is more potential in SE Asia including Singapore, Malaysia, Thailand, Japan, China and Indonesia. His performance over the last few years speaks for itself and he has been able to catch major trend turns.   

Since the beginning of 2022, the KLSE, SGX and most SE Asian markets have outperformed the Dow Jones, Nasdaq and S & P. China is emerging from a long slump and these markets offer much better valuations compared to developed markets.

 

The background is also more favorable.  Inflation is more benign locally as Asian countries did not inject massive stimulus, bailouts, free helicopter money and muti billions for the Ukraine/ Russia war.

 

Add rising interest rates, inflation to this mix and this is another headwind. In China they are actually lowering interest rates while in Asian markets as Singapore, Japan  and Malaysia interest rate rises/inflation  are not as severe. Fiscal and monetary policies are also more restrained.

 

Backing this up is an excellent article in today's Edge by Manu Bhaskaran. He details that trends of Foreign Direct Investment are increasing for all the Asian markets. Trends of FDI are reversing from developed markets to Asian markets  where valuations are not as demanding. Supply chain reconfiguration could speed up relocation to Asia.    

 

Take care

Bill