INFOGRAPHICS: Can the 2017 boom continue?

Investors who sought yield in Asian markets in 2017 were well served. That, however, means valuations have hit record highs.

As the global economy continues its recovery from the 2008 crisis, Asia enjoyed a remarkable 2017, with a boom across asset classes.

The fact the United States has yet to follow through on President Donald Trump’s protectionist rhetoric has helped unwind negativity over his election and that, along with ample central bank-supplied market liquidity, has fuelled solid inflows to Asian assets.

According to Emerging Portfolio Fund Research (EPFR) which tracks capital flows into emerging markets, $19.54 billion worth of money had flowed into Asian ex-Japan markets for equities and bonds in the first 10 months of 2017.

The asset performance didn’t disappoint investors who are hungry for yield. Asian equities (ex-Japan) had delivered nearly 40% total returns in US dollar terms as of mid-December, the strongest returns since 2009.

The stock surge was led by China, South Korea and India, which also produced nine of the region’s 10 biggest IPOs in 2017. Asian bonds also outperformed the 10-year annualised return since 2008, having delivered an 8.08% return for the year as of December 14, according to JP Morgan’s emerging market bond index (EMBI).

Of course, this means asset values are reaching new heights. The question is: will the full-on boom continue into a new year?


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