Southeast Asia is home to some of the world’s worst-performing stock indexes this year after foreign funds rotated out of the region into technology-heavy markets in North Asia.
(Bloomberg) — Southeast Asia is home to some of the world’s worst-performing stock indexes this year after foreign funds rotated out of the region into technology-heavy markets in North Asia.
Most of the equity benchmarks in the region have declined in 2023 after its stock markets offered traders a safe haven in last year’s global rout. Economies such as Thailand and Malaysia — where benchmark gauges have shed about 10% and 7.1%, respectively — face headwinds such as uncertainty over the formation of a government and slowing trade.
That has led to a 5.9% decline in the MSCI Asean Index in the second quarter, and trailing the broader global gauge by the most since September 2020.
With the artificial intelligence-driven theme still very much a focus in the second half of the year, the regional measure may only see a recovery in 2024, said Alan Richardson, a portfolio manager at Samsung Asset Management. “Southeast Asia is more cyclical, value, thematic-based on old economy sectors and will perform better when the US transitions to a rate-cut cycle,” he said.
(Corrects chart to show the correct performance gap between MSCI Asean Index and MSCI AC World Index)
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