The Rise of Emerging Markets Asia
The Emerging Markets Asia Index, which is comprised of China, Indonesia, South Korea, Malaysia, Taiwan, Thailand, and the Philippines, may finally enter into a new bull phase. As you can see from its chart, the index has already brought itself out of its primary bear wave following its move past its 100-day moving average (blue line). Since then, the stock has based into and just recently completed a bullish reversal in the form of a cup and handle. With its ability to clear its pivot point, the index is now set to establish a fresh bull run. Moreover, a recent golden cross between its 50-day and 100-day MAs also indicate a likely change in trend. With this, we can expect institutional inflows, both foreign and local, to finally move into the equity markets like that of the Philippines.
Fundamentally, it is quite logical that the region may have already seen its bottom last October 2022. The reason being is the fact that the US Federal Reserve is only expected to hike by 100 basis points for the entire 2023. This is in stark contrast to last year where the Fed hiked by 425 basis points. With a less restrictive monetary environment and, thus, less downside pressure on emerging currencies, risk assets may finally see a big relief in the present year.
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*Consensus target price or average target price given by the major foreign and local brokers of various stocks on top of index names are available in our Equity Advisor!
