South Korea's stock market is tipped to be the top performer in a region trending upward, says Mercer Investment Consulting, which is releasing its annual 'fearless forecast' survey. Polling 31 Asian-based investment managers representing $6.3 trillion of assets, the consultant finds they expect stock indices to close higher in 2004 than their level in October, 2003 when surveying commenced.
Respondents' average expectation of Korea puts the Kospi 16.7% above its October 2003 level by the end of the new year; in other words, the average response puts it hitting 913 in December, with predictions ranging from 1,010 to 831. The Kospi stood at 782 when the survey began, and closed yesterday (Monday) at 851.
Equity markets in Taiwan, with an average 12.6% increase, Singapore and Indonesia (12.2% each), Thailand (11.8%) and Hong Kong (11.6%) should also do well. Garry Hawker, Singapore-based practice leader for Asia ex-Japan at Mercer, says these predictions will please investors looking to strengthen positions in these markets.
Other countries include Malaysia (10.5% increase), the Philippines (6.3%) and Australia's All Ordinaries Index - the dog of the lot at 3.6% expected increase.
Mercer also asked fund managers to predict the best and worst sectors, according to the MSCI all countries Asia Pacific Free index. Fund managers like financials, consumer/discretionary and materials/IT sectors - and believe underperformers will include utilities, consumer staples and healthcare/telecoms.
Among some of the other interesting responses, more fund managers believe Hong Kong's capital markets will be impacted by local corporate profitability than the performance of the US economy and stock market (not the case for Singapore). In addition, 59% of managers predict alternative investment mandates will increase in 2004 in Asia, particularly for hedge funds.
The most speculative question asked investment pros to guess the Asia ex-Japan fund management centre in 2010. Hong Kong won by a slivery 51%. Singapore, surprisingly, garnered a mere 31% of the vote. For 18% of fund managers, Shanghai will be the place to be.