PERSPECTIVE3-5 min to read

Investing in Asia and the impact of coronavirus: webinar

Asia specialist Robin Parbrook discusses the outlook for Asian equities and the long-term investment implications of coronavirus.

06/05/2020
China-stockmarket

Authors

Caspar Rock
Chief Investment Officer
Clare Anderson
UK Head Schroders Family Office Service
Robin Parbrook
Co-Head of Asian Equity Alternative Investments

Asian equities relatively attractive 

Asian companies and governments have a big advantage compared to those in the West: they came into the coronavirus crisis with much lower levels of debt. This puts them in a stronger position to navigate today's challenging environment. 

Following a significant bounce, Asian stock markets now look "mildly cheap".

"The world is changing"

The pandemic is accelerating many long-standing trends, including a shift away from globalisation and increased investment in technology. 

Robin also thinks the crisis will see governments playing a much greater role in business around the world. This can be a risk for investors, as China's experience shows. 

Despite incredible growth in the mid-1990s and early 2000s, the country's stock market performed poorly. The disconnect is explained by the fact that many big listed companies were controlled by the government and forced to focus on the "maximisation of employment and investment" at the expense of shareholder returns.

Asian stock markets today look very different. However, as Western states play an increasingly large role in their economies, companies may find it hard to balance the competing demands of governments and shareholders.  

Economic outlook and key investment themes 

Chinese activity is picking up, with some sectors rebounding faster than others. While construction and manufacturing have largely recovered, consumer demand remains weak.

Robin expects to see a similar path of recovery in Europe and the US. This suggests that expectations of a "V-shaped" recovery look too optimistic, which could give rise to renewed market volatility.  

Despite near-term headwinds, Robin sees a lot of opportunities in Asian markets. Key themes he is looking at include Chinese consumption, battery technology and healthcare technology. 

If you were unable to join this live webinar but would have liked to listen in and pose your own questions, more will be held in coming weeks. Please look out for invitations from your usual contact.

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Authors

Caspar Rock
Chief Investment Officer
Clare Anderson
UK Head Schroders Family Office Service
Robin Parbrook
Co-Head of Asian Equity Alternative Investments

Topics

Perspective
2020 market volatility
Market views
Equities
Disruption
Asia Pacific
Economic & Strategy Viewpoint

Cazenove Capital is a trading name of Schroders (C.I.) Ltd which is licensed under the Banking Supervision (Bailiwick of Guernsey) Law 2020 and the Protection of Investors (Bailiwick of Guernsey) Law 2020, as amended in the conduct of banking and investment business. Registered address at Regency Court, Glategny Esplanade, St. Peter Port, Guernsey GY1 3UF, (No.24546) . Schroders (C.I.) Limited, Jersey Branch is regulated by the Jersey Financial Services Commission in the conduct of investment business. Registered address at 40 Esplanade, St. Helier, Jersey JE2 3QB, (No.31076).

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