North Asian equity markets are expected to outperform the broader region this year, driven by China’s reopening and a post-pandemic recovery-led earnings rebound. Liquidity from easing monetary and fiscal policy, along with Asian central banks’ early victory on inflation, is expected to defend against an incoming downtrend, keeping North Asian equities resilient.
Grace Tam, chief investment officer-Asia at BNP Paribas Wealth Management, expects North Asia to outperform this year. Abigail Yoder, U.S. equity strategist at J.P. Morgan Private Bank, is positive on Chinese equities, and expects returns to more likely come from corporate earnings than valuations. Goldman Sachs sees the north versus south disparity in Asia as a top investment theme in 2023.
North Asia will also benefit from the U.S. and EU economies holding up better than was feared 12 months ago, alongside the rise of artificial intelligence. Herald van der Linde, head of equity research at HSBC, said many firms in Korea and Taiwan benefit from increased demand for chips and cloud services.
Overall, North Asian equity markets are expected to remain resilient and outperform the broader region this year, driven by China’s reopening and a post-pandemic recovery-led earnings rebound.