Traders find haven from global stock gloom in Southeast Asia
As global equities struggle after the Federal Reserve’s latest hawkish rhetoric, Southeast Asia’s growth outlook is making the region an investor favorite.
Man Group Plc, BNP Paribas SA and Credit Suisse Group AG are among those touting the region’s resilience after commentary at Jackson Hole reignited a worldwide selloff over the past week. The benchmark MSCI Asean Index has fared much better than the broader MSCI Asia Pacific Index and is set to outperform a gauge of global stocks for a third straight quarter.
The growing bullish chorus points to a reopening of Southeast Asia that’s bringing back a swarm of tourists, as well as booming domestic demand that’s helping shield it from a global slump. And with the tailwind from commodity exports, the region’s earnings outlook seems more promising versus most markets squeezed by slowing consumption and rising costs.
“We have a lot of pent-up demand here,” said Joshua Crabb, head of Asia Pacific equities at Robeco Hong Kong Ltd. “Foreign direct investment is happening, opening-up is continuing to happen and the long-term structural story is quite positive. The market has been incredibly resilient in the face of what would usually result in a dramatic selloff. That to me, is a real vote of confidence.”
Most of the region’s biggest economies are expected to grow at least 5% this year, according to estimates compiled by Bloomberg, with the scrapping of pandemic-era restrictions offering a key boost.
Malaysia more than doubled its annual target for tourists following an uptick in recent months, while Thailand expects to reap in $11 billion from a surge in foreign visitors in the second half.