A spring awakening is sweeping through Asia’s financial markets, which have become increasingly popular among investors. Asia constitutes a strong growth region, notably for BNP Paribas Asset Management. The Group has positioned itself as a leading investor in the region, while integrating Environmental, Social and Governance (ESG) criteria into its asset management.
Flourishing activity across Asia’s financial markets
While the world’s financial markets have seen a slowdown since the start of 2018, Asia’s financial markets have witnessed a flurry of activity for over a year, underlining the strong economic growth among countries in the region. China’s growth has picked up to reach 6.9%, while its benchmark stock market, the Shanghai Stock Exchange, has expanded by 6.58%. The Hong Kong stock exchange also shot up 36% and in 2017 recorded its strongest rally in six years.
Japan has not lagged behind—Japanese stocks earned 6.5% in 2017 and the Nikkei, the country’s leading stock index, rocketed up 19.10%. The Land of the Rising Sun is now one of the main beneficiaries of the uptick in global growth. The country has also benefited from vast internal reforms—a depreciating Yen overseen by the Bank of Japan, lower tax rates on corporations, pension funds invested in industry, etc.
"Its long-term performance is similar to that of stocks, with very low volatility. And this means that in a portfolio context, convertibles can be a powerful diversifier , with a high correlation with equities, but a limited correlation with high yield debt and even a negative correlation with government bonds, "Saber said. Van Ingen.
A key region for BNP Paribas Asset Management
The Asian stock markets—and Japanese equities in particular—have won favor among investors.
For Arthur Kwong, Chief Investment Officer of Asia Pacific Equities at BNP Paribas Asset Management, “it’s a very good time to look into Asian equities. The valuations are very attractive at this moment and Asian companies have a lot of cash in their balance sheets, which is good for raising dividend payouts, performing mergers and acquisitions and carrying out buybacks.”
BNP Paribas Asset Management is now one of the top financial service providers for corporate and institutional investors in Asia-Pacific, with the subsidiary managing 60 billion euros in assets for these customers.
IT’S A VERY GOOD TIME TO LOOK INTO ASIAN EQUITIES. THE VALUATIONS ARE VERY ATTRACTIVE AT THIS MOMENT AND ASIAN COMPANIES HAVE A LOT OF CASH IN THEIR BALANCE SHEETS.
BNP Paribas’s subsidiary aims to expand its activities, notably in Japan, and plans to boost the value of its medium-term funds by investing in equities issued by Japanese companies and/or companies operating in Japan. The subsidiary also recently launched two new SRI funds allowing investors to buy into Japanese stock markets, while accounting for financial and extra-financial criteria, notably tied to a company’s environmental and social responsibility and its corporate governance.