Asia stays resilient amid challenging environment

CEO Datuk John Chong said that investors should look beyond the short term noise and focus on the region

LONDON: Asia’s underlying fundamentals remain solid with resilient growth prospects despite headwinds from US-China trade friction and rising US interest rates, according to Maybank Kim Eng, the investment banking arm of the Maybank group.

The investment bank, which hosted the Invest Asia UK, expects the US and China to continue driving global growth and investment, which will benefit emerging Asia. 

“Rising demand from the world’s two largest economies supported Asia’s export recovery last year. This year, Asia’s private investment is experiencing a revival after a long slump,” Maybank Kim Eng said in a statement. 

It added that amid gradual US Fed rate hikes, Asian central banks have also begun normalising interest rates, mitigating the impact of a stronger dollar on emerging market currencies.

CEO Datuk John Chong said that investors should look beyond the short term noise and focus on the region’s long term growth prospects, which was still expected to outshine that of developed economies.

He said while there have been substantial capital outflows as a result of the stronger US dollar, higher interest rates and US-China trade friction, Asia was now better positioned to weather the volatility. 

“Countries in the region have largely strengthened their current account balances, increased their foreign reserves and kept inflation in check over the past five years. Stronger private and infrastructure investments as well as a rising middle class are significant growth thrusts going forward. 

“We believe investors will see real value emerging in Asian corporates after the recent market tantrums and should capitalise on the opportunity,” Chong said in the statement.

The Organisation for Economic Co-operation and Development (OECD) estimates that Southeast Asia is poised to achieve average GDP growth of 5.2% between 2018 and 2022. The region’s growth is underpinned by the improvement in trade prospects, big-ticket infrastructure projects, resilience in domestic demand, and the aggressive drive by some governments to develop industries related to information technology and e-commerce through investment incentives. 

The investment bank, which hosted the Invest Asia UK, saw more than 400 delegates from 23 countries participated. 

A total of 51 corporates from 13 countries including, China, South Korea, Taiwan, Malaysia,  Singapore, Vietnam, India and Pakistan, covering North Asia, Asean, and Mena with total market capitalisation of about US$679bil and 118 funds across Europe with a combined US$19bil in assets under management participated in the conference.

Invest Malaysia London, in partnership with Bursa Malaysia, will also be held alongside Invest Asia UK on the second day of the conference to promote Malaysia’s investment opportunities.

Six Malaysian companies, namely Yinson Holdings, Maybank, Malaysia Airports Holdings Bhd, UMW Holdings, Top Glove Corp, and Tenaga Nasional Bhd will be featured.