Displaying items by tag: asia
Japanese stocks have been mired in a multi-decade bear market since 1990. Remarkably, Japanese equities had an annual gain of -0.3% between 1990 and 2023. Some of the major reasons for this poor performance was that stocks become extremely expensive at the peak in 1990, companies were less profitable than European and US competitors, deflation was raging, and the currency was also very strong which hurt exports.
Now, we are at the opposite end of the spectrum in many ways. Japanese companies are flush with cash and have low levels of debt. Deflation is no longer a threat, while the Japanese yen has weakened and become quite competitive with other countries. On the aggregate, profit margins have risen from 3% to 5.5% since the early 90s. In turn, Japanese stocks have returned 7.4% annually since 2010.
Another positive development for equities is that activist investors have been successful in unlocking shareholder value on balance sheets. The government is also actively encouraging consolidation within fragmented industries and companies to focus on maximizing shareholder value.
Despite these initiatives, Japanese stocks still remain quite cheap with half of companies trading below book value. Yet, there is some compelling evidence to believe that Japanese stocks have more upsides given this combination of catalysts.
Finsum: Japanese stocks are quite cheap relative to the rest of the world. In addition, there have been quite a few positive developments in recent years in terms of corporate behavior and government policy.
Stash…Away we go?
It’s a great way to travel, apparently.
In order to offer a suite of diversified multi asset model portfolios, StashAway, Southeast Asia’s wealth management company, recently joined forces with Blackrock, the largest asset manager in the world, according to crowdfundinsider.com.
The portfolios were forged by Blackrock’s analytics and ETFs. StashAway will be their manager.
General Investing portfolios – through the StashAway app – abets the ability of investors to access diversified, multi asset ETF portfolios. The portfolios are optimized for risk adjusted returns over the long haul. Like a regular smorgasbord, investors have a choice of three different General Investment strategies.
The StashAway supported General Investing portfolios dial in on a dual role: optimizing for long term risk adjusted returns while ensuring the risks are unrelenting. While doing the same, the Responsible Investing portfolio also optimizes for the effect of ESG.
And limited thinking? Ha; not around here. The third General Investing strategy, which is supported by BlackRock, is a new long term investment strategy. Its objective is handing the investor broader diversification.
“We’re excited StashAway’s launching portfolios powered by BlackRock’s analysis,” said Peter Loehnert, BlackRock head of ETFs and Index Investing APAC, according to hubbis.com. The partnership, he continued, will give more investors across Asia access to BlackRock’s insights and investment capabilities via StashAway’s platform. It will offer diversified and liquid ETFs as building blocks for portfolio construction, maximising the value of ETF investing.
Exchange-traded funds focusing on environmental, social and governance themes have been one of the fastest-growing market segments in a couple of years, but so far have yet to reach the acceleration in Asia as they have in the U.S. and EU, until now. The most recent data from the Asian Pacific has more than 1.5x as many funds starting in the first half of 2021 than all of 2020. The asset flows are even more staggering. Inflows since in the first half of 2021 are 10x larger than all of 2016, and they have almost already reached 2020’s $2bn. The standout countries are Australie, China, and Taiwan which comprise over 85% of all the ESG ETF assets. Moreover, these trends are expected to continue with more advantages on transparency and liquidity than other market segments.
FINSUM: These are astounding numbers for ESG growth, and faster-growing economies might not have the incoming restrictions to ESG the US could be facing.
Southeast Asia is bursting on to the Fintech scene with a host of new companies. Ascend Money, is one of Thailand’s darlings and just became the country’s newest unicorn. Ascend found early funding from Jack Ma’s Ant Group Co. and Charlene Pokphand Group, and just secured $1.5 billion in its latest round of funding. Ascend plans to use the funding to improve its mobile wallet app TrueMoney. They view this latest funding as a testament to the positive ecosystem in Thailand for start ups and financial technology companies. Still Ascend’s $14 billion operation that spans Cambodia, Indonesia, Myanmar, the Philippines, Thailand, and Vietnam, faces competition from established financial firms in the region like Siam Commercial Bank Plc and other financial start ups.
FINSUM: This story is a reflection of the bourgeoning Fintech industry in the South East Asia region, no doubt the leader in emerging markets for new technology companies.