Forget China. There are better investment opportunities in the rest of Asia, reports dividend investor Zoe Kahn of BNY Mellon IM.
Problems in China, such as lockdowns, more regulation of tech companies, and an aging population, do not mean that there are no investment opportunities in the rest of Asia. So says Zoe Kahn, director of Asian income strategy at BNY Mellon. “Especially in terms of value and dividend stocks, we see a lot of opportunity in the rest of Asia to generate sustainable investment returns over the long term.”
Positive factors
According to Kan, Asian companies have enough liquidity to pay more dividends than in previous periods. “This is a result of lower levels of corporate debt compared to the rest of the world.”
Asian markets fell in line with other regions, but Kahn said growth rates in the region remain strong. Additionally, Kahn asserts, inflation is on the rise in Asia but is still lower than in the US and UK.
Also positive: “A lot of the region has just come out of the Covid lockdown and borders have reopened, allowing recovery to take place. Thus, policy makers may have more flexibility from the West to boost their economy.”
China beware!
Despite the problems in China, Kan says it is entirely possible for Chinese stock markets to rebound in the near term, given the sharp correction in recent months.
However, Kan has reduced its position in China, with only a few selective investments. It avoids Chinese state-owned enterprises in order to be less sensitive to unexpected political changes from the Chinese government.
The IEXProfs Editors It consists of several journalists. The information in this article is not intended to be professional investment advice, or as a recommendation to make certain investments. Editors may hold positions in one or more of the listed funds. Click here for an overview of their investments.
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