According to leading investment banks on Wall Street (USA), Vietnamese securities can bring relative safety to investors.
Going into the second quarter, CNBC had a survey of analysts from Goldman Sachs and JPMorgan Asset Management to see which markets in Southeast Asia were their top picks.
The survey results of CNBC show that Indonesia, Vietnam and Singapore are the most potential markets in Southeast Asia.
Desmond Loh, portfolio manager at JPMorgan Asset Management, highly appreciates Vietnam and calls it a “star in recent years” for its resilience and economic growth. He said Vietnam is one of the few economies globally that has experienced positive economic growth during the pandemic.
“To capitalize on growth, we place our trust in banks and high-quality consumer representatives,” said Mr. Loh. However, he did not name specific stocks .
Mr. Desmond Loh also added that Indonesia is a top choice in Southeast Asia for Wall Street banks because most of the country’s population does not have a bank account or does not have access to financial services. main.
Strong commodity prices are good for export earnings in Indonesia as well as the country’s trade balance, thereby supporting the rupiah as well as short-term growth prospects in Indonesia, Mr. Loh added.
Global commodity prices have been soaring since the war in Ukraine broke out in late February. Russia is a major oil producer while Ukraine is a major exporter of other commodities such as wheat and corn. In Asia, Brent crude oil futures prices rose more than 30%.
Singapore is another Southeast Asian country that Goldman Sachs likes. According to Mr. Moe, there are three main reasons why investment banks like Singapore.
First, Singapore is improving its growth and economic momentum from a region that is recovering from Covid-19 related setbacks.
Second, in Singapore, the banking sector accounts for a large share of stock indexes and has benefited from the shift to tighter monetary policy and rising interest rates.
Third, digital economy companies are springing up more and more and are being included in the Singapore indexes.
Indonesia’s Jakarta Composite Index is up more than 7% this year, while Vietnam’s VN-Index is up about 1% in the same period and Singapore’s Straits Times index has gained more than 9%.
Meanwhile, the MSCI index of Asia-Pacific shares outside Japan fell 6%. On Wall Street, the S&P 500 is down 4.6% so far this year, while Europe’s Stoxx 600 is down about 6%.
Southeast Asian stocks – a haven from geopolitical tensions
According to Mr. Loh, while Europe is grappling with a range of concerns from the spike in commodity prices caused by the Russia-Ukraine conflict, Southeast Asia is “relatively insulated” from rising geopolitical tensions in the region. Europe because Russia and Ukraine account for less than 1% of the region’s exports.
“The escalation in geopolitical risks, leading to higher commodity prices in the short term, helps strengthen ASEAN’s commodity export markets,” he said.
According to investors, the US Federal Reserve’s (Fed) monetary tightening has not had a big impact on Southeast Asia.
In March, the Fed raised rates for the first time since 2018 and the prospect of more hikes raised concerns about capital outflows and currency depreciation in emerging markets. in Southeast Asia, a phenomenon that occurred in 2013 when bond yields spiked after the Fed hinted that asset purchases might decline.
“We don’t expect capital outflows like 2013,” said Mr. Loh, explaining that country-level balance sheets in Southeast Asia are “generally much healthier” than they were a decade ago. previous century.
Most of Southeast Asia’s central banks, with the exception of Singapore, have yet to tighten monetary policy. That is partly because inflation is relatively less severe in the region than in developed economies in the West.
According to Moe, Southeast Asian economies are now more resilient than in past cycles, external balances are in better shape and currencies are priced attractively.