The latest Asia Fund Manager Survey by Bank Of America Securities indicates that India has emerged as the most favoured market as Japan relinquished the top spot, China too notched up a few spots higher and has now risen to third spot from the lowest rank in the previous month. Thailand remains the least preferred market.
According to the survey, a turnaround in economic growth outlook has led to favourable market return expectations for the region. Furthermore, “consensus earnings estimates do not appear overly optimistic compared to last month, allowing room for upward revisions in the future,” added Bank of America Securities.
What are the top sectors to bet on in India?
According to the survey by Bank Of America Securities, one of the key reasons why India got the top spot is because India is “perceived as a likely beneficiary of the supply chain re-alignments following the effects of tariffs.”
Specifically for India, Bank of America survey indicated that “infrastructure and consumption continue to be the primary themes that investors are keenly monitoring.”
In the Asia ex-Japan portfolio, participants of the survey by Bank Of America Securities are ‘Overweight’ on telecom and software. They are avoiding energy, materials, and consumer discretionary ex-retailing/e-commerce. The outlook on semiconductors has improved.
Top sectors to bet on in Japan & China
They added that in Japan, “banks, key beneficiaries of higher rates, continue to be the top choice, while real estate has risen to second place.” In China, the most favoured themes are “AI/semis and buybacks/dividends,” the report stated.
Investors are turning optimistic on China, with only 16% seeking opportunities in other markets, compared to 26% last month. Also, a record 10% report that they are fully invested in China. Readers must, however, remember that this survey by Bank of America Securities was completed on May 8, prior to the US-China meeting in Geneva.