Global investors bet on SEA stocks amid US-China tensions

Southeast Asian startups have grappled with a funding winter, but for some countries, the public markets aren’t feeling the slump.

Investors have been parking their money in Singapore and Malaysia stocks, with the region as a whole considered less volatile amid US-China tensions.

Supply chains are shifting away from China and into Southeast Asia, attracting manufacturing and capital inflows, Paul Chew, head of research at Phillip Securities Research, tells The Business Times. That’s in addition to the region’s abundant and cost-effective resources, including steel and aluminium as well as data centers.

Photo credit: Tang Yan Song / Shutterstock

Craig Loveless, head of Norton Rose Fulbright’s corporate and merger and acquisitions team in Asia, also says that Southeast Asia is a “safe haven for the future,” as its growing economies – underpinned by its demographics – can support long-term growth.

Over the past year, as of January 31, the MSCI ASEAN Index has logged returns of 16%. That’s still lower than the S&P 500’s nearly 22% increase over the same period.

However, US shares have recently been volatile, and Chinese stocks have slumped in the past few years, though DeepSeek’s recent rise has helped them rebound.

Moving up the value chain

Southeast Asia’s various markets have had disparate performances.

Singapore and Malaysia, in particular, have performed stronger year to date, say market watchers.

Singapore’s strong equity market performance “has been driven by good gains in its financial, communication services, and industrial sectors,” says Colin Ng, head of Asia equities at UOB Asset Management (UOBAM).

The Straits Times Index soared to a new record twice in February. In the latter instance, it traded as high as 3,943.23.

The relative stability between the Singapore dollar and US dollar also contributed to the “stellar gains” in the country’s market, adds Ng.

As for Malaysia, Tan Altundag of Pictet Asset Management says he is seeing “pockets of opportunities” as the country undergoes “significant change through reform and investment.”

Sectors of choice

No true safe haven