Macro Research iFAST 2022 Outlook: The Show Must Go On | FSMOne SG - Research Highlights

Macro Research

iFAST 2022 Outlook: The Show Must Go On

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• We think that equities will outperform fixed income in 2022, especially as inflation is set to go higher and the Fed is likely to hike rates in 2022.

• Equities: In the DM space, we favour European and Japanese over US equities. In the EM space, we like Hong Kong and Chinese equities - in particular, we see more than 40% upside for the Hang Seng Index by end-2023.

• Bonds: Investing in Fixed Income remains challenging, particularly in a rising yield environment. We think the Asian High-Yield looks attractive, and recommend that investors opt for an active approach in this sector.

• Key Sectors: We think a global economic recovery is supportive of value and cyclical sectors, especially Financials (Global and Chinese Financials). Investors should also consider investments in the Digital Economy (though valuations are not as attractive) due to their disruptive nature.

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