By Tom Westbrook and Samuel Shen
SINGAPORE (Reuters) – Asia and even China are emerging as surprisingly resilient investment markets as Donald Trump returns to the White House, while fund managers are optimistic the region can withstand tariffs better than Europe.
Investors say Asian exporters and supply chains have weathered trade tensions better, China is ready to boost domestic demand and India’s rapid growth is attractive.
Stock bureaus in the region’s financial centers reported little panic as voters returned Trump to power on tax cuts and protectionism – a contrast to sharp declines in European auto and durable stocks.
“We saw gradual buying pick up further,” Shinji Ogawa, co-head of Japan Cash Equities Sales at JP Morgan on Tokyo of Trade, said Thursday, with investors opting for industrials and financials.
“There are some stories that don’t necessarily allow the ‘Trump trade’ to dictate everything,” he said, pointing to interest rate hikes in Japan and a policy meeting in China this week that was expected to approve measures to stimulate the economy. .
It’s fair to say that the investment playbook derived from Trump’s first term has been to buy U.S. stocks and their performance has sucked money out of Hong Kong and into the S&P 500, dealers said.
But those with global mandates or looking to diversify continue to hold on to their Asian investments, after a small pullback – mainly from India – through October.
“In this environment where the cost of dollar capital is unlikely to fall that much… you’re likely to see a lot more bias towards growth,” said Ken Peng, head of Asia investment strategy at Citi Wealth in Hong Kong.
“So India will continue to do that.”
A rebound in shares of Japanese automakers and a rise in banks and heavy equipment maker shares, which are sensitive to capital spending, showed buyers were focusing there.
In Vietnam, shares of industrial estate owner Becamex rose in anticipation of companies expanding production, while developer Kinh Bac City, which has a golf and hotel project with Trump’s private conglomerate, hit its upside trading limit.
BETTER PREPARED
During Trump’s first term, China bore the brunt of his aggressive trade policies, and growth and the yuan took a hit. This time, investors think they know a little more about what to expect from Trump and say China is better prepared.
“China is now better prepared for any constraints, whether technological, military or financial,” said Charles Wang, chairman of Shenzhen Dragon Pacific Capital Management Co.
