After another uneven year in Asia, from a lagging China to global macro pressures and geopolitical concerns, the beginning of 2023 is showing more bright spots for investors — and opportunities for their sell-side research firms.
“The back half of 2022 was a story of the underperformance of China. This trend, when combined with further fracturing of geopolitics, led many to try and ‘diversify regionally’ with renewed interest in places like India and Japan,” said Martin Yule, head of Asia-Pacific research at UBS. “In contrast, 2023 has seen tentative steps back towards China, but without the same vigor of the last few years.”
After the country abruptly dropped its ‘zero-Covid’ approach in late 2022, all eyes have been on China’s post-pandemic reopening and recovery. “Investors are happy that the debate has returned to the pace of economic recovery rather than mutant strains of the virus, but geopolitics remains the cloud overhanging North Asian equities,” Yule added. “Investors continue to grapple with global influences of inflation, tightening policy in much of the world, and weakening growth.”
But among the clouds, there is cause for cautious optimism . . .
To select the members of our 30th annual All-Asia Research Team, Institutional Investor solicited the opinions of portfolio managers and analysts at institutions with major securities holdings in Asia (ex-Japan). We received responses from more than 5,500 investment professionals at over 1,500 institutions.
Participants first rated their top firms in each sector on a scale from 1-5, and then separately rated individual analysts or economists/strategists at those firms to create two distinct results for each sector. A numerical score was produced by weighting each vote based on both the respondent’s Asia ex-Japan equity commissions and their average rating.
The same scores were weighted by each voting firm’s Asian ex-Japan equity assets under management to produce the AUM-weighted rankings.
Using those scores, ranks were then determined. Firms/analysts were designated runners‐up when their scores came within 35 percent of the third-place scores.
The individuals surveyed are kept confidential to ensure continuing cooperation. Voters must meet eligibility requirements, and winners must achieve a minimum vote count.