Outlook for Asia
Overall, Asian equity index valuations are trading well below long-term historic averages, and at a significant discount to developed markets, particularly the US. Yang and Hargreaves believe that there is scope for this discount to narrow.

Asian economies enjoy relatively solid fundamentals, with room to ease policy as we approach the start of a monetary easing cycle, with US dollar strength likely to cease being a headwind. Although concerns over the risk of US recession have been climbing, Asia’s growth prospects continue to compare favourably with consensus earnings' growth expectations of around 25 per cent for 2024 and 15 per cent for 2025. They believe that companies operating in Asian economies may see less earnings' vulnerability from a global slowdown relative to what is being implied in valuations, although India appears to be an exception given already elevated expectations.

They said that investors need to consider many things when investing in Asia or emerging markets. While becoming hotbeds of consumption and innovation following decades of rapid industrialisation, investors must still be mindful of geopolitical risks and the global economic cycle. But with these economies enjoying stronger fundamentals, liquidity conditions set to improve, and governments across the wider region supporting industry with pro-growth reforms and supportive measures, Yang and Hargreaves believe that Asia and emerging markets have some of the most exciting investment opportunities in the world.