Three reasons to stay invested in Asia this year

DESPITE recent turmoil, Asia remains a bright spot for investments. In retrospect, the first quarter of 2021 has been a wild ride for investors. Set off by a surge in the US 10-year Treasury bond yield (to above 1.7 per cent), global capital markets tumbled by mid-February, placing a wet blanket on investors' red-hot optimism at the start of the year.

This is perhaps even more so for investors in Asia ex-Japan equities, having to contend with the drastic drawdown of more than 10 per cent after Chinese New Year, erasing almost all year-to-date gains.

Since then, investors' confidence for Asian equities has faced a series of tests - first by the emergence of tightening regulatory scrutiny on China Internet giants, followed by a strengthening dollar and rising rate hike probabilities. On the other hand, recent economic indicators from major Asian economies like China, Taiwan and South Korea continue to paint a rosier outlook of a post-pandemic recovery this year.