Asia investors must focus on the region’s "robust" data instead of the U.S. election results, according to Aberdeen Standard Investments.
“I find it amazing that we’ve sat here for two days discussing … elections and I’ve barely heard anyone talking about the data,” said Aberdeen Standard Investments’ Head of Asian Sovereign Debt Kenneth Akintewe during his interview on CNBC’s “Street Signs Asia” on Thursday.
“For Asia, it’s very important to remember that the elections is actually not the most important thing going on,” he said, urging Asia investors to focus on the region's economic performance instead. “The data is one of the most important things going on.”
Akintewe explained that the recent “robust” data that comes out of Asia that indicated constant better-than-expected momentum.
“I think that is why you’re seeing strong performance from regional assets outside of just the elections and we think that’s gonna continue,” he said. “Ultimately these things tend to be driven by underlying fundamentals so we think that external balance of payments positions will remain supported going into the … start of next year and over the course of most of next year.”
Shares in Asia-Pacific rose on Thursday, with the Hang Seng index at the top of major markets in the region as it rose more than 2%, as of Thursday afternoon Singapore time.
“You’re seeing a recovery in exports, production, the (Purchasing Managers’ Index) indices now — not just in manufacturing but in places like China and India also … the services sector as well,” Akintewe noted. “We’ve already seen better economic data than what we previously anticipated, so … growth momentum going into next year is actually looking pretty good.”
On Wednesday, a private survey revealed that China’s service sector activity is rising in October. Meanwhile, another private survey noted that services activity in India is thriving for the first time in eight months in October, according to Reuters.
Asian economy
In October, Dan Fineman, co-head of equity strategy for the Asia Pacific at the Swiss bank, said that Asia’s economic resilience remains strong amid the coronavirus pandemic.
“I think clearly Asia is going to be resilient in the face of a second wave in developed markets in the West,” he said.
Fineman’s statement comes as the US and Europe face a surge of coronavirus outbreaks.
“We need to look at the shift in consumption patterns that has occurred in the West since the Covid pandemic began. Although services spending has cratered in a number of countries as the pandemic hit, we’ve seen a shift of consumption patterns away from services towards goods — and that has enabled Asian exports to improve in recent months,” he said.
“As long as that shift in consumption patterns in the West continues away from services towards goods, actually the damage to Asia from a second wave in the West might be quite limited,” he said during an interview on CNBC’s “Street Signs Asia.
He noted countries that are worth investing in due to their success in managing the pandemic, such as South Korea, which he describes as a “top pick.”
“They’ve handled the pandemic quite well, and they don’t really have much of a domestic problem as far as the pandemic is concerned,” the analyst noted, pointing out the improvement in the outlook for the country’s export sector.
Fineman also commended countries such as Australia and Singapore, which showed “relatively low risk on the pandemic.”
