Weekly: Asia’s softened property and equity markets


Economic slowdown and geopolitical uncertainties have taken a large amount of froth out of Asia’s property and equity markets in recent years
Taimur Baig, Radhika Rao15 Nov 2019
  • On the property side, residential property price growth has moderated across the region
  • This has been mostly driven by growth and trade slowdown…
  • … but also, in some cases policy orchestrated (China, Thailand, and Singapore)
  • On equities, recent rally notwithstanding, North Asian stocks are subdued, valuation-wise
  • In contrast, India, Indonesia, Malaysia, and Thailand look rather frothy
Photo credit: AFP Photo


Taking stock of Asia’s property and equity market valuation

Trade war, investment uncertainty, soft patch in the electronic cycle, and unfavourable geopolitical dynamics have taken a large amount of froth out of Asia’s property and equity markets in recent years. While the level of stock and equity prices is by no means low, there is a tell-tale lack of exuberance in the financial markets. Our analysis of regional property and stocks prices paints a fairly sobering picture.

On the property side, residential property price growth has moderated across the region in the past couple of years, mostly driven by growth slowdown, but also in some cases orchestrated by cooling measures (China, Thailand, and Singapore). Despite low rates and comfortable liquidity, economic uncertainties appear to be dominating the real estate market dynamic.



At the same time, with the exception of Hong Hong, which is coming off a very high base, there are no instances of outright decline in property prices in the region so far.



On equities, recent rally notwithstanding, North Asian stocks are subdued, valuation-wise. In contrast, four markets in Asean and South Asia look rather frothy—India, Indonesia, Malaysia, and Thailand. Investors appear to be betting on a subsantially improved 2020 for these economies.



To read the full report, click here to Download the PDF.

Taimur Baig, Ph.D.

Chief Economist - G3 & Asia
taimurbaig@dbs.com

Radhika Rao

Economist – India, Thailand & Eurozone
radhikarao@dbs.com


 

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