Asian Equities - Is this the ‘buy the dip’ moment?
Josh Crabb, head of Asian equities at Old Mutual Global Investors
“It seems investors are having second thoughts on how negatively the Trump administration could impact Asia. Asian equities, as measured by the MSCI Asia ex-Japan index, have registered solid gains since the beginning of 2017. As we have maintained ever since the election of Donald Trump, we believe fears of heightened protectionism impacting the region are somewhat overdone. These now receding fears, together with a weakening US dollar, are providing a current tailwind for the region. There are good reasons to be optimistic – Asian equities are under-owned and at 1.5 times price-to-book value, compare favourably with US equities, which are nearer to 3 times price-to-book value. Additionally, earnings growth is forecast to rebound strongly this year. In our view, the relative valuations between Asia and other developed markets could well be the ‘buy the dip’ moment for Asian equities, especially amongst economically-sensitive sectors.”