“This year has been a rewarding one for stock investors. Anyone who missed the rally probably wonders if it is too late to join the party. We don’t believe it is,” said Andrew Swan, BlackRock’s head of Asian and global emerging markets equities.
The high returns seen in Asian equities, he added, have been led by a better-than-expected and synchronized global economic expansion, which helped companies register better earnings growth — a trend that looks set to continue into 2018.
Asia is a big beneficiary of a continued recovery in the global economy, Swan said. And a weak U.S. dollar, which is not expected to pick up much next year, will add to the region’s advantage, he added.
Even though valuations have gone up, they are only “back to multi-year averages” at the moment, compared to other asset classes globally where prices are “on the expensive side versus history,” Swan said.
“So Asia still remains cheap relative to history and relative to other asset classes,” he said.
