[Asia Economy Reporter Park Jihwan] Global investment banks (IBs) have predicted a bullish trend for Asian stock markets next year, identifying South Korea as a preferred country.
According to US CNBC on the 3rd (local time), JP Morgan forecasted that emerging market stock indices could rise by up to 20% next year.
Due to the economic recession caused by the COVID-19 pandemic this year, there was a strengthened preference for safe assets, leading investors to avoid emerging markets except for China and India. However, the situation is expected to change 180 degrees next year.
JP Morgan identified South Korea, along with Brazil, Indonesia, and Thailand, as countries with good investment opportunities among emerging market stocks. Promising sectors include discretionary consumer goods, entertainment, and leisure.
Credit Suisse also predicted that the Asian region will enter an 'earnings super cycle' next year, expecting relatively strong returns in Asian stock markets.
Morgan Stanley Capital International (MSCI) Asia Index (excluding Japan) is projected to rise 19% by the end of next year, surpassing the global stock market increase of 15%. This is attributed to stable economic growth, improved exports, currency appreciation, and an expected sustained earnings per share (EPS) growth over the next 3 to 5 years.
Among Asian countries, Credit Suisse selected South Korea as the top preferred country, expecting a 43% EPS growth next year. They explained that if the global economy rebounds next year, it will be an opportune time to invest in South Korea, which is sensitive to the global economic cycle. Credit Suisse also listed Hong Kong, Singapore, China, and Thailand as preferred countries. By sector, real estate and banking are seen as promising.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
