Asian Equities: A Multi-Decade Opportunity – M&G

Amanda Cheesley Deputy Editor 10 February 2023

Asian Equities: A Multi-Decade Opportunity – M&G

David Perrett, M&G Investments co-head of Asia Pacific Equities, discusses investment opportunities in the region.

At the firm’s annual investment forum in London last week, David Perrett of M&G Investments extolled the benefits of investment in companies in Asia. He said that Asia, and especially China, will lead the way in renewable energy.

“It’s a very interesting region to invest in,” Perrett said.

Growth for South Korean electric vehicle battery makers and Chinese solar energy companies has accelerated sharply in recent years. China, for instance, now leads the world in clean energy production and produces more than 70 per cent of all solar photovoltaic panels, half of the world’s leading electric vehicles and a third of its wind power.

The long-term outlook for consumption growth is still strong in the region, particularly in the trend of “premiumisation,” where consumers in emerging markets want to upgrade the quality of goods and services they consume as their wealth rises. Perrett said that there is little inflationary pressure in China and the economy is reopening, so they are overweight in China. He believes that China equities are attractively valued both in absolute and relative terms. He is also positive about Indonesia, saying that it’s a young country and strategically placed. 

Perret has managed M&G’s Asian Fund since 2019. Its top 10 stock contributors in 2022 included Hong Kong-based Pacific Basin Shipping, China-based Yanzijiang Shipbuilding, Indonesian-based Bank Mandiri, Hong Kong-based property developer Sun Hung Kai Properties and Chinese multinational Brilliance China Automotive. 

Last year, the bottom 10 contributors were Samsung Electronics, biopharmaceutical company Hutchmed China, and South Korean internet conglomerate Naver.   

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