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Schroder Investment: Re-focus on Asian domestic economies. Asian stocks can provide stable dividend income.
In terms of asset categories, Asian stocks can provide stable dividend income, while fixed income can offer attractive yields. Stocks can also provide capital growth, and ideally, investment should be made within a flexible and diversified asset portfolio.
On February 20, Schroders Global Investment published an article stating that over the past 50 years, Asia has experienced rapid population growth, leading to local growth in the region. By 2023, the population in Asia is expected to reach 4.8 billion, and it is projected to increase to 5.3 billion by 2050. By 2030, the middle-class population in the Asia-Pacific region is expected to increase from 1.38 billion in 2015 to 3.49 billion. The favorable population structure in the region, along with the continuous expansion of certain industries within the region, will drive structural growth, mitigate the potential impact of US import tariffs, and support local Asian businesses. Forecast for middle-income population growth Using India as an example, a good labor participation rate and the increasing disposable income of local people are supporting local consumption and reducing their dependence on the international market. The same is true for Indonesia, Malaysia, and Thailand. In addition, India's investment market relies mainly on local funds flowing in, especially through local National Savings Plans, rather than overseas funds. As of December 2024, the amount deposited in India's Systematic Investment Plans, which are regular investments by retail investors in mutual funds, has reached a historic high of 264 billion rupees (around 23 billion Hong Kong dollars). In other parts of Asia, Indonesia is also a good example where there is still significant room for further financial services outreach. In Indonesia, over 80% of the population still does not have personal bank accounts or access to comprehensive financial services, and the local bank account ownership rate is expected to increase. Indian investment market supported by local funds Banks in Taiwan and South Korea also offer attractive dividend yields and benefit from stable trade relations with major economies such as Mainland China, the United States, and Japan. These banks are also in a favorable position to take full advantage of economic trends and investment flows in Asia. In the context of the local economy, the resilience of Singapore's economy makes its Real Estate Investment Trusts (REITs) attractive to investors seeking income and growth potential. The local economy is relatively strong, with economic growth exceeding expectations in 2024, an increase of 4% year-on-year, which can lead to sustained real estate demand, further driving rental growth and property price appreciation. Meanwhile, Singapore's manufacturing sector development is booming, driving up industrial property rentals, which should compress yields and support the stock prices of real estate investment trusts. With expected interest rate cuts and increasing demand for high-quality, sustainable assets, investors in real estate investment trusts may benefit. In order to further unleash the growth potential of Asia, many companies in the region are market leaders and able to provide strong profit growth. For example, advanced semiconductors, which have emerged due to the application of artificial intelligence (AI), are mainly produced in Asia, led by Taiwan and Mainland China. The industrial sector (including electric vehicle battery manufacturers and globally exporting mechanical companies) is an important driver of technological progress and economic growth. Asia is also a pioneer in the development of these key technologies. Overall, Asia provides significant support for global economic growth because of stable basic factors in the region, strong corporate profit growth, and attractive valuations relative to developed markets. Strong domestic demand in Asian economies should be able to withstand tariff pressures. In terms of asset classes, Asian stocks can provide stable dividend income, while fixed income can provide attractive yields, and stocks can achieve capital growth, ideally through investments in a flexible, diversified asset portfolio.
Purvesh: Expected to introduce more powerful stimulus measures to raise the allocation of Chinese stocks to a high level.
Sino-Canada Fund: There is a greater possibility of upward volatility in the current technology market. The proportion of defensive dividend sectors in the industry allocation can be moderately reduced in the short term.