Mon, Mar 12, 2018 - Page 16 News List

HSBC to bet on Asian shares this year

By Crystal Hsu  /  Staff reporter

Asian equities, including local shares, are likely to outperform US and European players this year after generating a 42 percent return last year, as economic fundamentals remain healthy, boding well for corporate earnings in the region, HSBC Global Asset Management Ltd said on Friday.

The fund manager said it expects the region’s GDP excluding Japan to increase 5.9 percent this year, almost as much as last year’s 6 percent, while earnings per share could grow 12.2 percent on top of a 22.2 percent advance last year.

“The macro environment remains favorable for Asia, where return on equity declined since 2010, but staged a strong rebound last year,” Hong Kong-based HSBC head of Asian and Indian equities Sanjiv Duggal told a news conference in Taipei.

Global investors generally stayed away from Asian equities in the preceding years due to concerns over a possible capacity glut, but adopted positive views after inventory adjustment efforts paid off, said Duggal, whose department manages assets valued at US$26 billion, with US$3.24 billion in local shares.

HSBC plans to increase holdings in consumer and social media companies in China to take advantage of a growing affluent population in the vast market, Duggal said.

In addition, the company is positive about financial stocks in India, Duggal said, adding that a bad debt cycle in the country is likely to have peaked, following the Indian government’s 2016 decision to demonetize banknotes and other reform measures.

Meanwhile, consumption-focused companies might find long-term support in Indonesia’s demographic dividend, as much of the country’s population is young, he said.

HSBC is to buy technology shares in Taiwan and South Korea amid pullbacks, especially companies that command leadership positions on the world stage, said Duggal, who was to visit technology firms in New Taipei City and Taoyuan during his stay.

Finally, biotechnology firms in India, China and South Korea deserve more attention as they move up the value chain, Duggal said.

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