Emerging markets in Southeast Asia should continue to perform well this year despite economic headwinds, says renowned fund manager Mark Mobius.
Mr Mobius, founder of Mobius Capital Partners, said having China as a major trade partner has contributed to the growth of Southeast Asian markets in recent years.
According to data from ASEANstats, mainland China's total trade value with Asean countries accounted for only 5% in 2004.
The trade posted continuous growth to reach 20% of the total in 2020, outpacing other major trade partners such as the US, the EU and Japan.
The Asean country with the highest trade value with China was Vietnam (28.1%), followed by Malaysia (19.2%) and Thailand (14.4%), which registered trade with the mainland worth US$98.8 billion.
Asean's total trade with China was worth $687 billion in 2020.
This year the brokerage projects Indonesia to be the most dominant market in Asean, followed by Thailand, said Mr Mobius.
Software, online shopping and transport are among the industries that are likely to post a good performance in 2023.
"You see very good growth in Asean as the region has a big population, double that of the US. It's an important consumer market," he told the three-day CLSA Asean Forum 2023 on Wednesday.
The region has bright spots for investment because of its improved governance, an increase in economic activity following China's recovery and the relocation of manufacturing from China to Asean countries, said Mr Mobius.
"As money goes into these markets, prices will increase and companies will get expensive," he said.
Mr Mobius said the outlook for the Thai stock market this year is promising because of the recovery in China as well as the tourism sector, with the downturn in export demand eventually recording a recovery.
Edward Park, chief executive of Institutional Equities at CLSA, shared a similar view as Mr Mobius.
"The future is now. With record inflows into emerging markets this year, Asean is well positioned to provide a wealth of investment opportunities, especially at a time when global markets face inflationary and recessionary pressures," said Mr Park.
