Stock Mutual Funds Amidst Asia Pacific Economic Recovery is Interesting

Share illustration (Photo: Doc. Antara)

JAKARTA - PT Manulife Asset Management Indonesia (MAMI) assesses that offshore equity mutual funds have attractive growth potential in line with the economic recovery in the Asia Pacific region.

PT Manulife Asset Management Indonesia (MAMI) Senior Portfolio Manager Equity Samuel Kesuma said that currently, shares in Asia Pacific (except Japan) are trading at more attractive valuations than shares in developed countries.

"As an illustration, the Price Earnings ratio for the MSCI Asia Pacific index (excluding Japan) is 20 percent cheaper than in developed countries," said Samuel in a statement received in Jakarta, Monday.

He explained that the Chinese government had issued six specific policies targeted at encouraging economic growth, after Morgan Stanley previously downgraded Chinese stocks due to economic slowdown and sector failure.

From India, he explained that he had had a cohesive and consistent reform agenda since 2014, in which India had a good and interconnected growth cycle.

In addition, business formalization and digitalization in India, supported by a large domestic market, and reinvestment incentives from the government, are able to improve their macroeconomy, thereby providing high profits for companies, increasing capital expenditure, and creating better credit growth.

"India will benefit from being a global manufacturing friend-shore. Supporting factors include the fact that wages in the Indian manufacturing industry are very competitive, lower than Malaysia, China, Taiwan, Vietnam and the Philippines. In addition, the working population in India is expected to surpass China, said Samuel.

On the same occasion, MAMI Chief Economist & Investment Strategist Katarina Setiawan said that from the end of June 2019 to the end of June 2023, inflation in the United States (US) and Europe increased far above the trend before the COVID-19 pandemic, namely sequentially from 2.1 percent. to 5.3 percent and from 1.3 percent to 5.4 percent.

Meanwhile, he continued, inflation in Asia is on the same trend as before the COVID-19 pandemic, currently the figure is just above 2 percent, and core inflation in all countries in the Asian region also appears to be decreasing, except Japan.

"Public finances in Indonesia are the healthiest among other developing countries. The ratio of private debt to Gross Domestic Product (GDP) has only reached 29 percent, so there is still opportunity for the private sector to improve," said Katarina.