Asian stocks could rise 9% through the end of next year, the average of 11 forecasts in a survey of experts compiled by Bloomberg.
`The Asian equity environment is pivoting,` said Frank Benzimra, chief capital markets strategist for Asia at Societe Generale SA, adding that he expects earnings to recover from the second quarter.
The MSCI Asia-Pacific Ex-Japan Index has fallen 19% so far in 2022, after falling 4.9% in 2021, widening its spread relative to other markets globally.
The MSCI Asia-Pacific Binh Duong Index has performed worse than the S&P 500 since the beginning of 2021.
Although no expert expects Asian stocks to decline next year, forecasts vary widely, from flat to a 15% jump.
The region’s broader index is also expected to beat the S&P 500 according to a survey of strategists, but will not be able to regain its peak in 2021 even if the most optimistic estimate turns out to be
A survey of Asian fund managers by Bank of America this month also found that about 90% of respondents predicted a rise in prices for Asian stocks outside Japan.
China’s lifting of lockdown measures due to the Covid-19 pandemic is expected to boost the struggling economy, along with regional trading partners, with growth forecast at nearly 5% this year.
Analysts also see the market recovery being driven by low valuations, followed by rising profit expectations.
`We think Asia could outperform in 2023,` Dan Fineman, co-head of capital markets strategy for Asia Pacific at Credit Suisse Group AG, wrote in a report this month.
A trend reversal next year is that China will become `investable` again, according to Tina Teng at CMC Markets.
`Positioning against the cycle with South Korea and Taiwan would make sense,` said Christian Abuide, head of asset allocation at Lombard Odier.
Attention is decreasing with markets in the South.
However, an important thing to note is that stock experts tend to be optimistic in the new year.
According to Bloomberg, there are many challenges in 2023, with concerns about the timing and extent of China’s reopening being the main concerns.
`The black swan next year is the risk of the Fed being ‘too slow again’, but this time being slow to cut interest rates,` said Havard Chi, head of research at Quarz Capital Asia Singapore.
