U.S. financial services giants Goldman Sachs and JPMorgan Asset Management both gave business news channels NBC Finance Channel Their top picks to invest in Southeast Asia in 2022, they were referring to Indonesia, Vietnam and Singapore.
Analysts at the companies told CNBC that Southeast Asia as a whole is relatively immune to geopolitical tensions in places like Europe, where the war in Ukraine has left investors on the edge of the region’s economic outlook.
Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs, said the underperformance of Southeast Asian equities, which “have been largely ignored by global investors for a decade,” suggests this will present an opportunity for investors.
Banks are a big driver for Indonesia
“In Indonesia, we are structurally bullish on banks as the majority of the population is still unbanked or underbanked. We are currently targeting leading private sector and state-owned banks as they have been aggressively driving digital adoption to accelerate financial penetration,” Desmond Loh, portfolio manager at JPMorgan Asset Management, told NBC Finance Channel.
Strong commodity prices also benefit Indonesia’s export earnings as well as the country’s trade balance, he said, adding that this could support the rupiah and Indonesia’s near-term growth prospects.
Vietnam grows despite pandemic
JPMorgan Asset Management also likes Vietnam, which Loh called the “star of the past few years” in terms of economic resilience and growth. He added that Vietnam is one of the few economies in the world that has achieved positive economic growth throughout the pandemic.
“To capitalize on growth, we are targeting high-quality consumer agents and banks,” he said, without specifying specific stocks.
Singapore’s growth momentum
Meanwhile, Singapore is another Southeast Asian country Goldman likes for three main reasons, Moe said.
In the city-state, the region’s economy and growth momentum are improving, the region is recovering from Covid-19-related setbacks, and the banking sector is heavily weighted in the stock index and will shift away from monetary tightening Benefit and rising interest rates. In addition to this, digital economy companies included in the Singapore index are “gradually emerging”.
Stock indexes outperform U.S. stocks
In terms of overall stock markets in the three countries, Indonesia’s Jakarta Composite Index is up more than 7% this year, while Vietnam’s VN Index is up about 1% over the same period. Singapore’s Straits Times index rose more than 9 percent.
By contrast, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 6% over the period. On Wall Street, the S&P 500 is down about 4.6% so far this year, while the pan-European Stoxx 600 is also down about 6%.
Hanoi Stock Exchange (Image: Arno Maierbrugger) U.S. financial services giants Goldman Sachs and JPMorgan Asset Management have named business news channel CNBC as their top pick for investing in Southeast Asia in 2022, targeting Indonesia, Vietnam and Singapore. Analysts at the companies told CNBC that Southeast Asia as a whole is relatively immune to geopolitical tensions in places like Europe, where the war in Ukraine has left investors on the edge of the region’s economic outlook. Southeast Asian equities underperform, ‘ignored by global investors for a decade’…
U.S. financial services giants Goldman Sachs and JPMorgan Asset Management both gave business news channels NBC Finance Channel Their top picks to invest in Southeast Asia in 2022, they were referring to Indonesia, Vietnam and Singapore.
Analysts at the companies told CNBC that Southeast Asia as a whole is relatively immune to geopolitical tensions in places like Europe, where the war in Ukraine has left investors on the edge of the region’s economic outlook.
Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs, said the underperformance of Southeast Asian equities, which “have been largely ignored by global investors for a decade,” suggests this will present an opportunity for investors.
Banks are a big driver for Indonesia
“In Indonesia, we are structurally bullish on banks as the majority of the population is still unbanked or underbanked. We are currently targeting leading private sector and state-owned banks as they have been aggressively driving digital adoption to accelerate financial penetration,” Desmond Loh, portfolio manager at JPMorgan Asset Management, told NBC Finance Channel.
Strong commodity prices also benefit Indonesia’s export earnings as well as the country’s trade balance, he said, adding that this could support the rupiah and Indonesia’s near-term growth prospects.
Vietnam grows despite pandemic
JPMorgan Asset Management also likes Vietnam, which Loh called the “star of the past few years” in terms of economic resilience and growth. He added that Vietnam is one of the few economies in the world that has achieved positive economic growth throughout the pandemic.
“To capitalize on growth, we are targeting high-quality consumer agents and banks,” he said, without specifying specific stocks.
Singapore’s growth momentum
Meanwhile, Singapore is another Southeast Asian country Goldman likes for three main reasons, Moe said.
In the city-state, the region’s economy and growth momentum are improving, the region is recovering from Covid-19-related setbacks, and the banking sector is heavily weighted in the stock index and will shift away from monetary tightening Benefit and rising interest rates. In addition to this, digital economy companies included in the Singapore index are “gradually emerging”.
Stock indexes outperform U.S. stocks
In terms of overall stock markets in the three countries, Indonesia’s Jakarta Composite Index is up more than 7% this year, while Vietnam’s VN Index is up about 1% over the same period. Singapore’s Straits Times index rose more than 9 percent.
By contrast, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 6% over the period. On Wall Street, the S&P 500 is down about 4.6% so far this year, while the pan-European Stoxx 600 is also down about 6%.
