As of Wednesday’s market close, Singapore’s Straits Times index was the top performing index across Asia-Pacific markets, up 3.25% to date. Image of Singapore’s skyline here with Marina Bay in the background.
Suhaimi Abdullah | Nurphoto | beautiful pictures
So far, only two major indexes across Asia-Pacific are in positive territory in 2022, and both are in Southeast Asia.
Since market close on Wednesday, Singapore Straits Times Index ranked first in the region, up 3.25% to date.
Morgan Stanley equity analysts Wilson Ng and Derek Chang said in a note published May 12.
“Global markets are grappling with growth moderation as fiscal stimulus wears off, interest rates rise as central banks tighten monetary policy, and inflation higher,” said Ng and Chang. due to the supply shock generated by events in Ukraine and China.”
“Despite the uncertain global outlook, Singapore’s macro conditions look relatively solid. GDP growth is expected to decelerate, but remains above trendline thanks to progress on reopening.” this year,” they said.
From Indonesia Jakarta Composite ranked second in the region, with an increase of 3.22% to date.
Many reasons justify the relatively better performance of ASEAN markets since the beginning of the year.
Chetan Seth
Asia-Pacific equity strategist, Nomura
Both indexes have outperformed their regional peers, which have fallen so far this year. China’s market is among the hardest hit.
The Shenzhen Ingredients in mainland China came in last among the region’s major markets, having fallen more than 24% since the start of the year. The Shanghai Composite also suffered heavy losses, down about 15% in the same period.
A combination of factors contributed to the weakness in Chinese stocks, from an uncertain regulatory outlook for industries like technology to worries about supply chain disruptions, as China for weeks has been battling the most severe Covid wave since early 2020.
Elsewhere in North Asia, South Korea Kospi and Taiex in Taiwan – where many large export companies benefited in the pre-pandemic phase – have all fallen by more than 10% year on year so far.
“Many reasons justify the relatively good performance of the ASEAN market relative to investment,” said Chetan Seth, Asia-Pacific equity strategist at Nomura, at the Association of Southeast Asian Nations. five. He cited factors such as the region benefiting from the economic reopening and the markets in Indonesia and Malaysia being “positively impacted by higher commodity prices.”
“Amid concerns about geopolitical risks and slowing global growth, ASEAN stock markets have generally performed relatively better because they have lower trade links with the rest of the world,” said Chetan. world – especially compared to North Asia,” said Chetan.
Bank of America’s Winnie Wu said the better performance of banks was another factor behind ASEAN’s stronger performance.
“With rising interest rates and a growing value cycle, banks are doing better in the region,” said Wu, China strategist and head of China’s larger financial institutions research unit. Quoc at the company said. “Singapore, Indonesia and Australia markets have relatively high financial index weighting and perform better, while financial markets have relatively low weighting in Japan, Korea and China indices. .”
