Review of Market Performance: 

Although inflationary and recessionary concerns in the US abated in 2024, investors continued to grapple with various uncertainties affecting global markets, including the US Fed’s rate-cut path, the outcome of the US presidential election in November, escalating geopolitical concerns in the Middle East, and growth concerns in China.

Nevertheless, Asian financial markets proved to be resilient during the year, although performance was uneven across different markets.

Performance of Asian equities and fixed income markets

Source: Bloomberg.

­Within the equities markets, China’s performance came as a positive surprise to many investors. Various supportive measures announced during the second half of the year, which targeted monetary policy, the property market, and capital markets, largely surpassed expectations and overshadowed ongoing economic concerns.

Meanwhile, Taiwan’s market remained strong, boosted by its technology leaders as they continued to see robust demand for artificial intelligence (AI)-related hardware and applications. However, the same could not be said by its tech-heavy counterpart, South Korea, indicating that investors may have put too much hype on the AI theme. In addition, South Korea’s highly anticipated “Value Up Program” stalled during the year, leading to some disappointment for investors.

In Southeast Asia, although the markets were largely impacted by uncertainties in the US, especially how the greenback affected local currencies, most markets remained resilient, supported by strong domestic demand and favorable demographics. Similarly, India continued to deliver positive returns as its long-term growth story remained intact despite the already high valuations relative to its regional peers.

Meanwhile, there was also a constructive tone within Asia’s fixed income markets. Asian investment grade bonds continue to have solid credit profiles, backed by corporates’ strong balance sheets and cashflows, as well as good access to funding. At the same time, the high yield market benefited from easing monetary policies, given the lower funding costs and refinancing options. The market has structurally changed and has become more diversified as the weighting of Chinese properties within the high yield sector has reduced significantly in the past few years.

Overall, despite the various market and economic uncertainties of 2024 continued to linger worldwide, Asia’s financial markets remained robust. However, as some of the key concerns in 2024 may have diminished, new challenges and risks are on the horizon. Vigilance will continue to be essential in this evolving landscape, where emerging economic and geopolitical factors could impact financial markets. Staying alert and adaptable will be key to navigating this new era.

To learn more, read the full report now: Value Partners | 2025 Market Outlook

^{The views expressed are the views of Value Partners Hong Kong Limited only and are subject to change based on market and other conditions. The information provided does not constitute investment advice and it should not be relied on as such. All materials have been obtained from sources believed to be reliable as of the date of presentation, but their accuracy is not guaranteed. This material contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.
Investors should note that investment involves risk. The price of units may go down as well as up and past performance is not indicative of future results. Investors should read the explanatory memorandum for details and risk factors in particular those associated with investment in emerging markets. Investors should seek advice from a financial adviser before making any investment. In the event that you choose not to do so, you should consider whether the investment selected is suitable for you.
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