The ability to foresee the future would be immensely useful in the stock market. Possessing such a power would let you accumulate wealth as surely as Warren Buffet in no time at all. However, that is not how the world works.
Having said that, it is entirely possible to predict with more or less precision how the Asian stock market will be in 2016 with reliable analysis and consensus from the experts.
But before that, a very brief recap of the hard times that we have overcome would be necessary as any outlook into the future would not be complete without analysis of the trends.
2015 saw slowing growth in emerging markets (mainly China) along with a plunge in crude oil prices to half of what they used to be. These two events led the global economy downhill resulting in lower stock prices at the end of 2015 than at the beginning.
In fact, Japan could be seeing the last of its four-year bull run in 2016, especially with uncertainty surrounding the US and China’s short-term recovery. History shows that in past rate-hike cycles, Asian stocks are more than likely to be hit hard for about half a year until the US fully recovers and leads the global recovery.
But the future is not all bleak. With OPEC’s latest report citing confidence that oil prices will recover in the long run and the Fed’s rate hike expressing confidence that the economy will recover, there is potential to be realized.
This addition will be featuring alluring Asian countries for investment and attractive sectors to watch out for in 2016.
Three Countries to Invest in for 2016
Proudly home to one of Asia’s highest GDP growth forecast at 5.9% for 2015, The Philippines will be holding presidential elections this year which is expected to boost investors’ confidence in the country, especially with its currency one of the least vulnerable to rising US rates.
With many stocks being traded for less than their book value and at a discount half of their historical average, all while dividends grow, South Korea seems ready to rebound into recovery. In fact, Morgan Stanley raised their ratings on Korea recently.
With the high possibility of rate cuts from the central bank combined with a substantial increase in infrastructure investment, ASEAN’s largest economy is one to watch. Also boasting one of the highest GDP growth rates at 4.9% which may seem a bit too low compared to 2011’s 6.5%, the country is in a great place to beat investors’ already low expectations.
Just keeping eyes on the countries themselves would not be enough without specific sectors to keep track of. The overall improvement in the country’s economy does not mean that all sectors will be benefiting the same. With different positions and plays, only a few are likely to stand out from the crowd and do exceptionally well.
Three Industries to Watch in 2016
A dark horse among sectors, healthcare has overtaken many favorites to be 2016’s best pick, not without reason. It is only when the times are hard that people realize that there are many luxuries in life that they can do without and only a few necessities to really keep them alive. This is where healthcare comes in.
With more of the wealthy baby boomers now at an age that requires regular medical checkups and care, the healthcare industry has nowhere to go but up.
Having always been a favorite among investors since the turn of the century, the tech sector hasn’t ceased in its creation of valuable services and infrastructure that businesses and consumers alike are spending their hard earned money on. 2016 will be no different.
Real estate investment trusts are in an extremely strong place for growth in 2016, especially with the current trend among millennials being averse to owning property. With great demand for affordable housing in notoriously expensive areas fueling the trend of smaller units, rental communities are expected to deliver good returns.
With all of that said, InvestAsian wishes all readers a prosperous year ahead and hopes to continue being a part in your investment decisions.
Happy new year!