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“For the last 15 years, nobody has wanted to touch it with a 10-foot pole,” Mark Matthews remarked in this interview.
The head of Asia research at Swiss wealth manager Julius Baer wasn’t talking about Livestrong wristbands, but Southeast Asian stocks. “We’re going into a golden era for Southeast Asia. Now that China is essentially off of global investors’ radar, there is a huge vacuum that needs to be filled,” he added.
Investors are struggling to safely park funds anywhere in equities right now, but they do seem to be betting on Southeast Asia’s stock markets.
Geopolitical tensions, rate hikes from the US Federal Bank, inflation at its highest in decades, and Covid-19 lockdowns in China have driven the need to look away from the world’s most common financial hubs.
Foreign funds have been net buyers of Southeast Asian shares every month this year, with the region seeing a total inflow of US$10 billion so far.
Growing investor interest is further evidenced by the fact that the MSCI Asean Index is on track to outperform the MSCI All Country World Index for a second straight quarter.
Image credit: Timmy Loen
Surprisingly, the Jakarta Composite Index – the best-performing major benchmark in Asia this year – is hovering near record highs despite global stock markets seemingly being in a bear grip.
Even more encouragingly, Southeast Asia sealed private equity deals worth US$25 billion in 2021 – a record for the region – showing investors are also keen to look beyond the public markets to invest their money.
Companies may eventually start to turn their attention toward the region too. Recently, Chinese EV maker Nio (NIO, NYSE) took the unique step of listing for a third time – on the Singapore Exchange.
Sticking with the city-state, two of its tech darlings appear to be eyeing the fintech sectors of its Southeast Asian neighbors.
Sea Group (SE, NYSE) plans to acquire an insurance company in Indonesia as the Singapore-based tech titan expands its financial services and takes a regional super-app battle with Grab (GRAB, NDAQ) and GoTo (GOTO, IDX) up a notch.
4 Stocks to watch
3 Market whispers
2 Eye-popping facts 👀
The one you didn’t see coming
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