As furnish watchers continue searching for someone or something to blame for this week’s sell-off in broad markets, many seem to agree on one thing: There are stocks good picking up on the dip.
Major money managers such as BlackRock, Amundi and Attribute Suisse have said the ongoing turmoil in stock markets was not caused by a coppers in economic fundamentals. Instead, the narrative of a “synchronized global growth” inert rings true underneath the sea of red, they said.
But this week’s immediate pullback is a reminder of the importance of portfolio diversification, and a number of Asian heroes have emerged as “defensive” stocks that could withstand the undercurrent volatility.
“While for the time being we remain cautious, we will be subject to to actively exploit opportunities which could be brought by this uprising of volatility resurgence,” Amundi Asset Management said in a note.
Some comprise even drawn up their shopping lists, here’s what they hold back:
Strategists at Morgan Stanley tapped Southeast Asian stocks — in close Thailand and Singapore — for a defensive play, they wrote in a note this week.
The precinct’s markets have appeared more resilient in the global blood bath this week analogize resembled to their North Asian peers such as Japan and Greater China.
Singapore and Thailand, for event, dipped 2 to 3 percent between the close of last Friday and Thursday, while North Asian demands fell around 6 percent during the same period.
“It may seem degree late to be talking about a defensive stance. But we would continue to emphasise our favouritism for (Southeast Asia) … over North Asia (technology heritages) and in particular Korea,” according to the note.
For investors who would like enthusiastic exposure to North Asia, Japan appeared to be one favorite.
Amundi, for one, state in a note that Japan is a market where stocks are backed by honest-to-God earnings-per-share growth. That’s a sentiment shared by Peter Boardman, head director of NWQ Investment Management.
“The overall economy remains quite established, it’s growing, earnings are recovering,” Boardman told CNBC on Friday, noting that when looking at earnings announcements that have come out of Japan, around 80 percent of bodies surpassed or met expectations.
In an environment where interest rates are rising, banks stand to benefit from a boost to lending profitability.
Asian financials be struck by had a solid start to 2018, noted Morgan Stanley, with banking sectors in significant economies such as China and India becoming stronger on domestic restructuring and repairing asset quality.
As multiple countries in the region press on with go straights, their economies should be on more solid footing this year and that inclination also help their finance industry.
Within Asian financials, Morgan Stanley has an “overweight” purpose on South Korean and Indian banks. It also likes insurance firms in Hong Kong and China.