Despite a weak macro backdrop, Asia earnings has posted positive surprises — with North Asian economies such as South Korea (56%), Thailand (56%) and Taiwan (51%) having the most number of companies beating consensus estimates, the French banking group found.
Despite attractive historical valuations, global mutual funds remain underexposed to Asia and emerging markets (EM), according to BNP Paribas Asset Management. Its head of Asia and global EM equities Zhikai Chen points out that foreign institutional investors have net sold US$111 billion ($155.9 billion) in EM Asian markets (excluding China) since the MSCI EM Asia index peaked last year.
“Quite a bit of money has been pulled out of the EM Asia markets, and this has been reflected in how our valuations in Asia have corrected. MSCI Asia is currently trading at about two P/E points below its 10-year average, while MSCI EM is trading about three P/E points below its 10-year average. There are substantial discounts to valuations in Asia at this particular time,” says Chen.
