From the ever-sharper focus on sustainability, to monetary and fiscal policies globally, to China’s equity and bond markets, to the growing potential for healthcare and biotech – Asia’s capital markets and investment landscape will remain full of opportunities and challenges in 2021.
We have gathered some insights from a few key industry players:
Elsy Li, group treasurer and head of corporate development, Sun Hung Kai
“We expect China’s onshore equity and bond markets to further grow and strengthen given the continued economic recovery, strong local liquidity, increased regulatory transparency and market reforms.”
“Outside China, we expect market activities to resume in general, although at a different pace due to the flight-to-quality by investors plus the speed of recovery of the respective local economy. Given low interest rates, it is hard to identify risk-adjusted and sustainable credit opportunities.”
Chee Sin Koh, director and senior portfolio manager, Conning Asia Pacific
“Dominant forces driving Asian markets include the continuation of global fiscal policies, financed by their monetary counterpart, amid ongoing rollouts of Covid-19 vaccinations. While Asia, overall, has contained the pandemic better than in the US and Europe, the world is only as strong as its weakest link – so we remain driven by the US.”
“Unique to Asia this year is the People's Bank of China leading the way in tightening monetary policy, diverging from the US Federal Reserve and European Central Bank. However, this is taking place against the backdrop of rising asset prices – more to prevent rapid appreciation rather than attempt to prick a bubble. This means 2021 is more likely to be a year for equity rather than fixed income markets.”
Rocky Tung, head of policy research, Hong Kong’s Financial Services Development Council
“Healthcare and biotech investments are emerging as mainstream. Investors are placing stronger emphasis on such investments, highlighted by the divergence in performance between companies in biotech versus other sectors. For example, at +49.5% in 2020, the Hang Seng Hong Kong-listed Biotech Index notably outperformed the Hang Seng Index (-3.7%). Hong Kong was the listing venue for 23 healthcare companies in 2020, and the strong momentum is expected to continue.”
“The past year has also seen a rise in sustainable investments. With the impact of climate change and the pandemic ahead of us, the financial services sector as the allocator of financial resources surely has a role to play.”
Mushtaq Kapasi, managing director and chief representative, International Capital Market Association in Asia Pacific
“The dominant trend for Asia’s capital markets this year will be sustainability. As products such as green, social and sustainability-linked bonds have become more mainstream, sustainability has finally started to permeate high-level investment policy and corporate strategy in the region.”
“The implications are wide. We expect in the near future to see not only new product development, but also Asian regulatory reforms, disclosure requirements, taxonomies, and even data and accounting standards related to sustainability.”
