Tim Orchard, Fidelity International’s chief investment officer for the Asia Pacific ex-Japan region, spoke briefly with finews.asia last week at a London forum organised by his firm. It wasn’t a particularly detailed conversation, but you can find the highlights here. You can also find the firm’s note on its outlook for Asia Pacific ex-Japan in 2017 here (published in December 2016).
Some excerpts below:
- Orchard says he is “more positive on the development in Asia that at any time in the past 25 years given the progress of the reform agenda in India and China.”
- Asian stocks are also more attractively valued on a relative basis versus US stocks. The region has underperfomed [in recent years] and is out of favour.
- By contrast, the “relative political stability of the west isn’t as strong as it used to be.” Clients are increasingly concerned with the political situation unfolding in the US and Europe.
- China and India may well become safer bets over time. The future of Modi’s government now looks to be more stable after the BJP’s win in the Uttar Pradesh state election earlier this year. This should “prepare the ground” for the general elections in 2019 and Modi’s broader reform agenda. The Chinese modernisation program is also developing steadily and should be bolstered by the 19th national congress in November.
- On a separate note, Fidelity became the first non-Chinese asset manager to receive a license to sell onshore funds in China in January 2017. The firm launched its first product earlier this month, a fund that invests in the Chinese onshore bond markets.