Mobius Still Bullish on Asian Stocks Despite Shadow of Trump
-MSCI Asia Pacific Index outpacing U.S., Europe gauges in 2017

-Lower valuations to support further gains amid reflation trade

Asian equities have overcome uneven earnings, a resilient yen and Donald Trump to outpace global markets this year -- and top investors including Mark Mobius say the rally has only just begun.

For Mobius, it’s the lure of the region’s rising middle class, while lower valuations keep Alan Richardson at Samsung Asset Management Co. bullish on a market that has more than three times the gains of the Stoxx Europe 600 Index this year and is also outpacing the record-setting S&P 500 Index. Mobius even has a plan for avoiding the fallout from any protectionist trade measures leveled at Asian nations by the Trump administration.

“The outlook for Asian equity markets is very good compared to the rest of the world,” Mobius, executive chairman of Templeton Emerging Markets Group, which has about $24 billion under management, said by e-mail. “Economic growth numbers projected for the region are far above that of other parts of the world, particularly Europe and the U.S.” The firm is “excited” by an uptick in consumerism in Asia, he said.

Behind their optimism is a clear calculation that the Asian growth story will persist. Home to the world’s fastest-expanding economies, the region is embracing the budding recovery in China, with mainland shares listed in Hong Kong leading Asian gains in 2017. Many strategists are encouraged by the latest earnings season, with Mobius expecting Asian profits to outpace the rest of the world as price growth returns and consumption rises.

Asian stocks are the best placed globally to benefit from the build-up of asset reflation, as the region stands to benefit from U.S. fiscal stimulus and recovering commodity prices, says Richardson, who helps Seoul-based Samsung Asset oversee about $173 billion.

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While the MSCI Asia Pacific Index has gained more than 7 percent this year, it trades at 17 times member company earnings, versus 22 times for the S&P 500 and 25 for the Stoxx Europe 600 gauge.

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www.bloomberg.com/news/articles/2017-02-28/mobius-is-bullish-on-asian-stocks-even-as-trump-s-shadow-hovers