Focused Insights

In 2019, global economic growth looks to have fallen to a post-financial crisis low due to slow-downs in the US, Europe, and China. Yet although trade growth weakened as the US-China trade conflict impacted business confidence and fixed investment, the labor market and consumption remained relatively healthy. This resilience, combined with looser monetary policy, contributed to strong performance in financial markets.

Trade war and recession fears were no match for risk assets in 2019. Stocks surged by double digits in most major markets, and the S&P 500 notched its best yearly performance in two decades. For Asia, there’s reason to remain upbeat about 2020.

The Federal Reserve has cut the federal funds rate by 75bps so far in 2019, a reversal from 2018 when it hiked rates by 100bps. With global central banks advocating accommodative monetary policy to counter lackluster economic growth and low inflation, rates are forecast to stay low in 2020.

Rising sea levels could submerge much of Bangkok, Shanghai, Ho Chi Minh City, Jakarta and Mumbai by 2050, according to new research from Climate Central, a US-based non-profit group. The paper claims southern Vietnam may all but disappear, and 10% of Thailand’s population now lives on land that will be underwater by mid-century. The displaced may number in the hundreds of millions.

With internet regulation and excess inventory risks out of the way for Asian technology companies, 5G and rising network effects for Chinese internet should prove to be key catalysts for 2020 and beyond.

Choosing the consumer sector when investing in China seems like a no brainer given the sheer size of the country's population at 1.4 billion. But concerns have mounted with slowing economy and weaker demand.