Home MarketsAsia Southeast Asian markets set for recovery with valuations in ‘bargain basement’, says Maybank

Southeast Asian markets set for recovery with valuations in ‘bargain basement’, says Maybank

by SuperiorInvest

A woman (R) adjusts the Philippine flag before the 51st Association of Southeast Asian Nations (ASEAN)-Republic of Korea Ministerial Meeting in Singapore on August 3, 2018.

Mohd Rasfan | afp | fake images

Southeast Asian markets could see a turnaround in 2024 thanks to cheap valuations and potentially high economic growth, after losing some steam last year, according to Maybank.

Improving growth, rising exports, a rebound in manufacturing and a better-than-expected outlook from Taiwan Semiconductor Manufacturing Company last week mean Southeast Asian markets are set for a better year, Thilan Wickramasinghe said. , head of Singapore research at Maybank. Investment Banking Group.

Southeast Asia is truly a bargain market when it comes to valuations“,” Wickramasinghe told CNBC’s “Street Signs Asia.”

The MSCI Southeast Asia Index is down just over 3% in 2023, compared with a more than 20% rise in the broader MSCI World Index, whose top five components are US-listed tech giants. Apple and microsoft.

The MSCI Southeast Asia Index was trading at around 13.21 times its 12-month forward P/E ratio, according to MSCI data, as of Dec. 29, compared with a forward P/E of 16.57 times for the MSCI Index. World.

The forward P/E captures the value of an index based on the earnings of its components.

US recession will not harm ASEAN

Maybank’s Wickramasinghe said even a possible recession in the United States will not dampen optimism in Southeast Asian markets, especially Indonesia, Malaysia and Thailand, which are heavily driven by domestic consumption.

Other markets in the region will also benefit from its growing presence in the chip and electric vehicle industries.

“That’s because the pie is actually growing and a lot of Chinese capacity will start to see a transmission back to Southeast Asia…especially with the AI ​​race and with the electric vehicle race… “If we take the AI ​​race alone, that will generate significant demand for chips.”

Wickramasinghe noted that Southeast Asian nations already have infrastructure in place to benefit from the growing demand for chips compared to a country like India, which may need time to catch up.

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