2025年市场展望：亚洲与新兴市场——转变浪潮中的机遇

2025 Market Outlook Asia and Emerging Markets:Opportunities amid shifting tides 2025 Market Outlook Asia and Emerging Markets:Opportunities amid shifting tides Foreword Contents Foreword3 Market disappointments over rising inflation, the uncertainpath of US interest rates, and the risk of a stronger US dollarcan impact asset prices in 2025. A more volatile globaleconomic backdrop suggests that investors will need to besmarter about how they diversify and manage risks. Thereis merit in being nimble and seeking diversified sources ofalpha. “There is a tide in the agents of men. Which taken atthe flood, leads onto fortune”– William Shakespeare The world faces a year of uncertainty going into 2025. Whilewe expect global growth to plod along in the first half ofthe year, the second half would be largely influenced bydevelopments in the US and China. The policies from theincoming Trump administration are expected to be inflationaryand boost US growth in the short term. However, the rise inprotectionism and tariffs should weigh on the global economyeventually. The uncertainty surrounding Trump’s policies andthe sequence of their implementation add a significant levelof unpredictability to the outlook. All eyes will also be onfurther stimulus measures from China. Targeted and effectivemeasures that lift consumer confidence and spending wouldbe viewed positively. Investment ideas Embracing Asia’s giantsFocusing on valueBeing tactical and nimbleSeizing thematic trendsEnhancing portfolio buffers As the investing landscape shifts in 2025, the reality ofclimate change remains. Rising temperatures, extremeweather events, and biodiversity loss continue to intensifyand impact EMs disproportionately. A holistic pathway tonet zero that includes the brown-to-green transition notonly addresses these issues, but also provides mispriced andimpact opportunities for investors. Views from the regionDifferent perspectives from our investment teams across the region.16 Risk radar20 While 2024 marked the start of the US Federal Reserve’s (Fed)rate cut cycle, a fuzzier inflation picture in 2025 suggeststhe pace of rate cuts is going to be tempered, and the Fed’sterminal rate may end up higher than initially expected. Carryshould be the main driver of bond returns in the new year.The spike in US Treasury yields in the last quarter of 2024 hasincreased the attractiveness of USD-denominated credits.At the same time, Asian local currency bonds fully hedgedto USD can offer higher yields due to meaningful carryadvantage from a cross-currency basis. Vis Nayar Chief Investment OfficerEastspring Investments Periods of market volatility present active opportunities inAsian and Emerging Market (EM) equities. Longer termgrowth drivers such as increased capital expenditure,decarbonisation, and supply chain diversification can lead tohigher earnings in these markets. Ongoing corporate reformsare expected to continue strengthening balance sheets inAsia, especially in Japan. China: Cautiouslyoptimistic India: Structural opportunitiesamid cyclical challenges Embracing Asia’sgiants Active management will be key for India’s equity market in2025 amid growing concerns over the economy’s slowinggrowth momentum, stretched equity market valuations andearnings uncertainty in the last quarter of 2024. China’s near-term uncertainties call for caution, but equityvaluations are relatively cheap, and the Chinese governmentmay implement additional stimulus measures. That said, whilethe government has improved its policy communication, itsmeasured approach to easing may fall short of investors’elevated expectations. As such, picking the right entry pointsand selecting stocks with visible earnings growth drivers wouldbe key, rather than chasing the market. Asia is home to some of the world’s most dynamic andinfluential economies. China, India and Japan stand out.Each is unique - China with its rapid industrialisation,India with its growing urbanisation and Japan with itstechnological prowess. Together they account for more than60% of the MSCI AC Asia Pacific Index. At the same time,their unique opportunity set merits standalone allocation ininvestor portfolios. While the Indian economy may facecyclical challenges, India’s equity marketpresents a structural opportunity. We currently favour the Consumer sector that benefits fromproduct and service upgrades, policy support, and costcontrol measures. Companies within the Materials, Industrialand Technology sectors that have low revenue concentrationand face intense price competition can benefit from theconsolidation that comes from supply-side reforms. Export-related sectors which are expanding into new geographiesbeyond the US also offer growth opportunities. We are monitoring valuations and potential margin pressuresclosely and currently see opportunities within the Financials,Telecommunication, and Healthcare sectors. Large-capitalisedcompanies appear more attractively priced compared to thei