Macro Research ASEAN: A Region of Reopenings and Recovery | FSMOne SG - Research Highlights

Macro Research

ASEAN: A Region of Reopenings and Recovery

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• ASEAN is reopening its borders to tourism, which will be a strong boost to ASEAN GDP and employment. This in turn should support equity prices.

• ASEAN equities earnings should be supported by multiple factors, such as (i) ASEAN equities’ pro-cyclical tilt, (ii) an improving situation in China, and (iii) a sustainable earnings rebound from historical lows.

• While ASEAN central banks are expected to normalise policy quicker than expected due to rising inflation, we believe the pace of tightening in ASEAN will unlikely be as urgent as the US.

• As a whole, we remain cautiously optimistic on ASEAN equities. Valuations are marginally expensive at the moment, but multiples should look more palatable over time if our earnings forecasts materialise. Using our target P/E ratio of 16.0X, we forecast an attractive upside potential of +21% by end-2024.

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: Premia Dow Jones EM ASEAN Titans 100 ETF (HKEX:2810) / Principal ASEAN Dynamic Fund Class SGD