Why Asia, Now?
The rising consumer class in Asia is approaching a key tipping point.
According to the Brooking Institute, in 2024, for the first time in history of the Asian continent, the consumer class will outnumber the vulnerable and poor.
Source: Brooking Institute, 2022
While the contribution of the consumer to economic growth can’t be understated, it is key to identify the changing nature of consumption.
As an example, in old Asia – owning a car, having a credit card and gaming depended on a certain level of income. In the new Asia you can hail a ride, have a digital wallet and game on your phone – affordably.
To better participate in this trend requires an active manager with a large on-the-ground team, who can cover small/mid-caps and not be constrained by benchmarks.
The premium for Asian equities is currently near 20-year lows relative to developed markets. With absolute valuations historically cheap, it’s time to reconsider your approach to Asia.
Source: FactSet, I/B/E/S, Goldman Sachs Global Research, 13 May 2022