While Asian equities (excluding Japan) have underperformed other regions so far in 2023, Eastspring Investments sees some bright spots for the second half of the year. “Growth is expected to increase this year to 4.6%, from 3.8% in 2022. Generally healthy macroeconomic fundamentals and medium-term earnings drivers such as supply chain rebalancing, a pickup in capex in real economy sectors, and increased decarbonisation and infrastructure spending bode well for the region,” writes the asset manager in its investment outlook for the second half of the year.
Eastspring further points out that Japan’s current equity high is underpinned by “strong corporate earnings and renewed interest from foreign investors encouraged by growing expectations for accelerated corporate reforms”. Also for China’s equity market the asset manager sees supportive signs.
Read more in Eastspring’s 2023 Mid-Year Outlook.