Goldman’s Moe Flags Varied Asia Vaccine Rate as Key Market Theme

(Bloomberg) -- A key theme for investors in coming months will be delayed economic recoveries among Asian markets struggling with low vaccination rates and the spreading delta variant, according to Goldman Sachs Group Inc.  

Asia faces a mixed growth outlook as some countries including Singapore race ahead with inoculations compared with laggards such as the Philippines and Indonesia, said Timothy Moe, chief Asia-Pacific equity strategist with Goldman in a Bloomberg Television interview. 

“You’ve got a variegated story, and that indeed sets up some investment opportunities looking into next year because you can have this staggered pace of recovery,” Moe said. “The market may start to trade that sequential change in outlook and that may be one of the themes that starts to emerge as the second half deepens.”

The spread of the more infectious delta variant and its impact continues to be a chief concern of investors in Asia and a persistent headwind for the region’s equities. In New Zealand, just one case of Covid-19 triggered big swings in the country’s currency and caused traders to suddenly pull back from rate-hike bets before the central bank refrained from raising rates on Wednesday. 

The other primary focus of investors in the region right now is China’s regulatory crackdown, Moe said. The firm prefers China onshore A-share listings over those traded elsewhere as they tend to be less impacted by regulatory tightening, he said.

“What is called upon now is a much more nuanced approach to China,” Moe said. For example, property managers are likely to continue to do well, even as the real-estate industry comes under pressure from regulation, he said.

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