.jpg "Real estate market in the south of Hai Duong city is bustling")
.jpg "Extremely dangerous forest fire risk in Kinh Mon, Chi Linh")
-ac017d3d3ce25d3405471795d6bb26f0.jpg "Gia Loc needs over 10 billion VND to invest in renovating and expanding landfills.")
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Southeast Asian stocks have cemented their position as a favourite investment for asset managers as they look to navigate ahead of a possible policy pivot by the US Federal Reserve.
Four of Asia's five best-performing equity indexes this month are from Southeast Asia, with Thailand leading the way.
The buying frenzy has pushed foreign capital into the region for a fifth consecutive week, while the MSCI ASEAN Southeast Asia Index is now trading near its highest level since April 2022.
The draw for a range of stock markets from Indonesia to Malaysia is the previously low exposure of foreign investors, alongside supportive local policies and attractive stock valuations.
These advantages have paved the way for Southeast Asian countries to take advantage of the shift of global investors away from larger markets like China, especially as the situation remains difficult in the world's second-largest economy.
“The Association of Southeast Asian Nations (ASEAN) members have been overlooked for too long,” said John Foo, founder of investment management firm Valverde Investment Partners Pte.
Investors are starting to see the many opportunities available here, from commodities companies in Indonesia, the stable real estate investment trust (REIT) market in Singapore to technology companies in Malaysia, exporters in Vietnam and many recovery support policies in Thailand, he said.
A key factor contributing to optimism about Southeast Asia is that foreign funds have not placed many trades here, leaving them room to expand their asset allocation.
Recent supportive policy catalysts such as Indonesia’s fiscal easing initiatives and pro-equity measures in Thailand and Malaysia are also boosting demand, according to Kenneth Tang, portfolio manager at Nikko AM Shenton Thrift Fund.
These countries also benefit greatly from interest rate-sensitive and high-yield sectors such as banking and real estate development. Brokerage firms are paying more attention to the Southeast Asian region.
Goldman Sachs upgraded Thai stocks this month on expectations that the newly created state-owned Vayupak Fund will provide both sentiment and liquidity support, attracting foreign capital back to the market.
Last month, Nomura bank also upgraded Malaysian and Indonesian stocks.
TB