Better days ahead for Asian equities
Medium- and long-term drivers are skewed positively, while macro backdrop is buoyed by strong valuations and robust expected earnings growth
AFTER a fantastic run last year, the performance of Asian equities seems to have mellowed. The region based on the MSCI Asia ex-Japan index started the year on a high before surrendering much of the gains after mid-February. Despite a lacklustre performance, our strategical view on Asian equities remains constructive.
Strong earnings outlook
The upside in Asian equities, particularly in the mid to longer term, will be driven by robust double-digit earnings growth in the coming years. Our forecast implies a 33 per cent and 14 per cent year-on-year earnings per share (EPS) growth in 2021 and 2022, respectively. These are strong numbers from a relative (that is, against regional peers) as well as absolute basis.
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