Through interviews with analysts from Goldman Sachs and JPMorgan Asset Management about which markets in Southeast Asia are their top picks, the top three markets are Vietnam, Indonesia and Singapore.
JPMorgan Asset Management highly appreciates the Vietnamese market, as Mr. Desmond Loh, portfolio manager at JPMorgan Asset Management, considers Vietnam a “star in recent years” in terms of economic resilience and growth. . He emphasized that Vietnam is one of the few economies in the world with a positive growth rate during the COVID-19 pandemic.
In addition, Mr. Desmond Loh also said that JPMorgan Asset Management is placing its trust in the private sector and also in Indonesian state-owned banks, as they actively promote the adoption of digital technology to accelerate penetration into the sector. financial sector.
The Russia-Ukraine tension has caused commodity prices to rise sharply, boosting Indonesia’s export revenue and helping its trade balance to benefit. That helps the rupiah increase in value and boost short-term growth prospects in Indonesia.
In order to promote digital economic growth, Indonesian President Joko Widodo said on March 28 that the country aims to have up to 20 million micro, small and medium enterprises (MSMEs) participating in e-commerce in the coming years. in 2022. This number is expected to grow to 24 million in 2023 and 30 million in 2024.
Meanwhile, Indonesia’s Coordinating Economic Affairs Minister Airlangga Hartarto said the country’s digital economy topped the Association of Southeast Asian Nations (ASEAN) with $70 billion, or 40% of the total. region, and is expected to increase to 146 billion USD by 2025. Minister Hartarto affirmed that thanks to digitization and pandemic response strategy, Indonesia can achieve its economic growth target of 5.2% this year. now compared to last year.
Singapore is another Southeast Asian market that Goldman Sachs appreciates. Timothy Moe, chief equity market strategist for Asia-Pacific at Goldman, said there are three main reasons the investment bank prefers Indonesia and Singapore, which is improved economic growth momentum. After the pandemic period, the banking industry contributed a large proportion of stock indexes and benefited from tight monetary policy and increased interest rates.
In addition, businesses operating in the digital economy are gradually developing and being included in the index baskets in Indonesia and Singapore.
Specifically, Indonesia’s Jakarta Composite Index increased by more than 7%, while the VN-Index increased by about 1% in the same period. Singapore’s Straits Times Index also rose more than 9%. Meanwhile, MSCI Asia-Pacific, excluding Japan, fell 6%. On Wall Street, the S&P 500 is down 4.6% year-to-date, while Europe’s Stoxx 600 is down about 6%.
In recent weeks, investors have faced a variety of concerns, from rising commodity prices due to Russia-Ukraine tensions to a rising interest rate environment amid major central banks such as the Federal Reserve Bank. The US state (FED) seeks to deal with inflation.
According to experts, Southeast Asia is less affected by geopolitical tensions in Europe, as Russia and Ukraine account for less than 1% of the region’s exports. Escalating geopolitical risks have led to a gradual decline in commodity prices in the short term, thereby reinforcing the advantages of commodity export markets in ASEAN.
Meanwhile, the prospect of the Fed raising interest rates even higher has raised concerns about money outflows and local currency depreciation to emerging markets in Southeast Asia. However, both analysts agree that Southeast Asian economies are stronger than in previous periods and therefore the risk is quite low.