Investors Continue to Believe in Asia’s Shallow Market

Asian stock and bond markets are at the top of the financial market, but some are viewing them as being near the end of their multi-year rally. At the same time, global investors are still taking a chance on obtaining more from the eye-catching market. After the global financial crisis that took place 6 years ago, the Asian stock market has experienced record highs, while bond yields have struggled to extreme lows and organizations continue to increase in cheap equity and debt.

What keeps investors returning to the Asian market is the quick increases in corporate earnings, which stems from a global desire for the market’s export of electronics and vehicles. The increase in domestic consumption has also played a part in enticing global investors. It is predicted that growth spurts will continue for the next 3 to 5 years, primarily in Korea and China. Julie Dickson, a portfolio manager with Ashmore Investment Management in London, does not believe that now is the time to get out, with the market’s potential. The Ashmore Investment Management is a fund with approximately $75 billion in total assets worldwide.

On the other side, many are questioning other issues that threaten to put a damper of the market’s growth, such as the economic issues involving Argentine’s debt default or the geopolitical tension between Ukraine and Russia. Over the past two months, other regions are cooling down. The European equities have started to fall, foreign cash has deserted European and Latin American equity markets, and outflows have resulted from U.S. equity funds and high-yielding bonds.

But even as the other regions continue to lose its flame and create worries for investors, the Asian market continues to be excluded from this group. The earnings for companies are constantly surpassing investors’ expectations, while bond yields offer up a nice cushion for an investor’s risk.