A key theme for investors will be a spreading economy among Asian markets struggling with low vaccination rates and delayed delta variant, according to Goldman Sachs Group Inc.
Asia faces a mixed growth outlook as some countries, including Singapore, race ahead with inoculations compared to laggards such as the Philippines and Indonesia, said Timothy Moe, chief Asia-Pacific equity strategist with Goldman, in an interview with Bloomberg Television.
'You've got a staggered story, and that indeed sets up some investment opportunities looking into next year because you can have this variegated pace of recovery, Moe said. The market may start to trade that sequential change in outlook and that could be one of the themes that starts to emerge as the second half deepens.
The spread of the more persistent delta variant and its effect continues to be a chief concern of investors in Asia and a persistent headwind for the region's equity markets. Covid - 19 triggered big changes in the country's currency in New Zealand and caused traders to suddenly withdraw 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 affected by regulatory tightening, he said.
'What is calling 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.