The Case for Buying Asia Stocks Over U.S. Ones

(Bloomberg) — An expected surge in election-related volatility in the U.S. stock market is paving the way for Asian shares to make a run at besting their American peers.

Since hitting an all-time low relative to the S&P 500 on Sept. 2, the MSCI Asia Pacific Index has outperformed the U.S. benchmark by almost five percentage points. That nascent trend is expected to persist at least through the November poll and potentially beyond, according to strategists.



chart: Asia-Pacific stocks languishing close to record relative low vs U.S.


© Bloomberg
Asia-Pacific stocks languishing close to record relative low vs U.S.

“There is a better than average chance that Asian stocks will outperform U.S. stocks over the course of the next month,” said Eoin Murray, head of investment for international business at Federated Hermes. “The volatility rise will be more pronounced in U.S. risk assets, and will pervade more globally but with less strength.”

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Fears about a contested election result and President Donald Trump’s decision not to push for further stimulus ahead of the vote have helped contribute to the recent weakness in U.S. equities. Meanwhile, a growing belief in a Joe Biden victory and Democrats winning control of both houses of Congress is seen benefiting Asian stocks by reviving the U.S. economy and trade flows.

Biden has a 12 point lead over Trump, according to a national poll of likely voters released Sunday, a little more than three weeks before the vote. The Washington Post/ABC News poll was conducted Oct. 6-9.

Democratic Landslide

“The probability of Asian equities’ outperformance will be higher under a Democratic landslide win,” said Nader Naeimi, head of dynamic markets with AMP Capital. “I firmly believe that trend will continue, Asia is under-owned and the U.S. is over-owned.”

Asia will also benefit from China’s strong economic recovery, a weakening dollar that has likely seen an end

The Case for Buying Asia Stocks Over U.S. Ones as Election Nears

Japan Stocks Look to Cap Fourth Weekly Gain After Rate Decisions

Photographer: Kiyoshi Ota/Bloomberg

An expected surge in election-related volatility in the U.S. stock market is paving the way for Asian shares to make a run at besting their American peers.

Since hitting an all-time low relative to the S&P 500 on Sept. 2, the MSCI Asia Pacific Index has outperformed the U.S. benchmark by almost five percentage points. That nascent trend is expected to persist at least through the November poll and potentially beyond, according to strategists.

Asia-Pacific stocks languishing close to record relative low vs U.S.

“There is a better than average chance that Asian stocks will outperform U.S. stocks over the course of the next month,” said Eoin Murray, head of investment for international business at Federated Hermes. “The volatility rise will be more pronounced in U.S. risk assets, and will pervade more globally but with less strength.”

Fears about a contested election result and President Donald Trump’s decision not to push for further stimulus ahead of the vote have helped contribute to the recent weakness in U.S. equities. Meanwhile, a growing belief in a Joe Biden victory and Democrats winning control of both houses of Congress is seen benefiting Asian stocks by reviving the U.S. economy and trade flows.

Democratic Landslide

“The probability of Asian equities’ outperformance will be higher under a Democratic landslide win,” said Nader Naeimi, head of dynamic markets with AMP Capital. “I firmly believe that trend will continue, Asia is under-owned and the U.S. is over-owned.”

Asia will also benefit from China’s strong economic recovery, a weakening dollar that has likely seen an end to its decade-long bull market, as well as a rotation into cyclicals and value, Naeimi added.

Thomas Poullaouec, head of multi-asset solutions for Asia Pacific at T. Rowe Price, also believes the region’s stocks are better placed than their U.S. peers to benefit from the

Asia Pacific is home to most billionaires globally, pandemic grows wealth

There are now 2,189 billionaires globally with a combined wealth of $10.2 trillion, as the pandemic-induced stock market rally catapulted the net worth of the world’s uber wealthy to a new high. 

As of July 2020, Asia-Pacific accounted for the highest number of ultra-high net worth individuals, with 831 (38%) of the super rich residing in the region, where billionaire wealth now totals $3.3 trillion, according to Swiss bank UBS’ new Billionaires Insights Report 2020. That compares to 762 (35%) across the Americas and 596 (27%) in Europe, the Middle East and Africa (EMEA). 

The findings, based on interviews and data from 2,000 billionaires across 43 markets, saw Asia-Pacific retain its global position as “the engine of wealth growth,” UBS Global Wealth Management’s Anurag Mahesh said at the report’s launch Wednesday.  

Mainland China emerged as the region’s top market for wealth creation, with 415 billionaires, followed by India (114), Hong King (65) Taiwan (40) and Australia (39). The U.S. is home to 636 billionaires, the study found.

Wealth generators

Much of the billionaire wealth growth seen this year was closely correlated to the market recovery staged since April’s dramatic sell-off, since the assets of the ultra wealthy are typically tied up in the public companies they run or invest in. 

However, from 2019 to the peak of the downturn in April 2020, Asian billionaire wealth emerged relatively unscathed, dropping 2.1% compared to 10.1% in EMEA and 7.4% in the Americas.

Manesh, Asia-Pacific co-head of UBS’s Global Family Office, said they could be partly related to the region’s dominance in two key  industries — technology and health care — which have surged in the wake of the pandemic.

Asia-Pacific is home to the world’s highest share of tech and health-care billionaires, accounting for 181 (8%) of the total billionaire population, compared

Alibaba needs to look for growth beyond China and Southeast Asia in a ‘bipolar world for technology’

  • Chinese tech giant Alibaba needs to look beyond China and Southeast Asia in order to sustain current levels of growth, according to Gil Luria, director of research at D.A. Davidson
  • Most of Alibaba’s revenue currently comes from its China retail marketplaces that include the Taobao and Tmall shopping platforms as well as its online-to-offline grocery chain.
  • The company’s most notable presence outside China is through Lazada, a Southeast Asian e-commerce platform in which Alibaba owns a majority stake. 



a sign on the side of a building: Attendees pass by an Alibaba.com display at CES 2019 in Las Vegas.


© Provided by CNBC
Attendees pass by an Alibaba.com display at CES 2019 in Las Vegas.

SINGAPORE — Chinese tech giant Alibaba needs to look beyond China and Southeast Asia in order to sustain current levels of growth, an analyst said Thursday. 

With more than 750 million active users in China, Alibaba is at a point where it is beginning to hit saturation, according to Gil Luria, director of research at D.A. Davidson. The company is already talking about lower-tier Chinese cities as potential growth avenues but Luria said the markets there are not as fertile as the top-tier cities and there is already stiff competition in those places. 

“Their growth is going to have to come from outside of China,” he said on CNBC’s “Squawk Box Asia” on Thursday. “For them to sustain the levels of growth they have right now, with China approaching saturation, Southeast Asia is only going to carry them for so long before they have to get into some of those other markets in order to sustain this growth.” 

Alibaba’s cloud business to become ‘less of a drag’ on profitability, analyst says

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Some of those potential growth markets include Latin America and Africa where e-commerce penetration still has room for growth and China has some influence. Alibaba has a presence in

First Complimentary Stock Valuation Calculator Focusing on South East Asia Region Has Been Launched

Developed by a Southeast Asia-focused M&A Firm and CPA

Global Partners Consulting Pte. Ltd. (“GPC”) (Head office: Singapore, Managing Director: Zenta Nishida) and its subsidiary GPC Gateway Pte. Ltd. launched on September 29, 2020, a complimentary stock valuation calculator specialized for Southeast Asian companies.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20200928005800/en/

Valuation Report

Free diagnostic tool that provides result in just 5 minutes

Traditionally, the stock valuation process has been complex and expensive for unlisted companies and small and medium-sized enterprises (SMEs), as it requires specialized financial skills and knowledge.
In particular, for Southeast Asian cross-border M&A, for which demand has been increasing in recent years, there have been challenges to obtain proper date for the stock valuation and perform the valuation using several assumptions which were determined on the professional judgement.
In response to this, we have launched a free online diagnostic tool that can provide results in just five minutes as a first step in understanding your company’s value when considering a cross-border M&A.

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Jointly developed by a Southeast Asia-focused M&A firm and a CPA

GPC has been in operation for 10 years and has been involved in numerous Southeast Asian M&A transactions as a cross-border M&A firm focusing on Japan and Southeast Asia. This tool is based on the knowledge of a professional M&A firm specializing in Southeast Asia and supervised by a Japanese CPA specializing in Southeast Asian corporate valuation.

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