Details Cookies
United Kingdom
Important margin product information

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money.

Cookie policy

This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy here and our privacy policy here

Macro Insights: Leaning in on Emerging Asia Macro Insights: Leaning in on Emerging Asia Macro Insights: Leaning in on Emerging Asia

Macro Insights: Leaning in on Emerging Asia

Macro 4 minutes to read
Charu Chanana

Market Strategist

Summary:  Given our expectation of further pain in US equities, we believe it remains prudent to consider an optimum asset allocation. Exposure to Asia ex-Japan provides scope for long-term growth in a portfolio, despite the abundant risks faced by emerging Asian economies from tighter Fed policy, rising food and energy prices or the slowdown in China. We see pockets of opportunity in Indonesia, India and Vietnam, while Singapore remains a safe haven in choppy markets.

When thinking of asset allocation, most investors need to look at emerging Asia (EM Asia) for the potential returns it can provide. This is besides the fact that there are ample risks, including 1) the Fed is tightening (which makes EM Asia prone to capital outflows); 2) energy prices are rising (and most EM Asia countries are energy importers), 3) food prices are going through the roof (with food being a major chunk of the consumption baskets in Asia) and 4) China’s growth slowdown is likely to weigh on Asia through the trade and investment channels.

Still, we believe it is prudent to add exposure to select emerging Asian countries in a portfolio for long-term growth due to the following reasons:

  1. Asia’s post-pandemic recovery is picking up steam as borders reopen. Activity in the contact‐intensive services sector is likely to rebound quickly, lifting employment. These jobs tend to be in the low-to-middle income spectrum, so the bounce in activity will help ensure a broad‐based upturn in consumption.


  2. EM Asia remains relatively more resilient to Fed tightening this time. Sustained strength in US demand should keep demand for Asia’s exports high. Meanwhile, a solid FX reserves position across most of EM Asian countries also reduces the possible ripples through the markets channel.


  3. China’s flip-flop policy measures are keeping traders and investors cautious and prompting a look at other EMs.

We look at pockets of EM Asia that show potential despite the global economic and geopolitical pressures.


Singapore stocks are a safe-haven amid the choppy global markets, being up by nearly 2% year-to-date as compared to an over 15% decline in the S&P. Singapore’s macro conditions are relatively more robust with GDP growth set to decelerate, but still remain at above-trend levels as the reopening provides tailwinds. China’s slowdown remains a risk but we believe it will be offset by pent-up demand.

Key sectors: Digital transformation and renewables remain a key focus area in Singapore as it leads ASEAN in these transformational spaces. REITs also provide a shelter against inflation, especially with 4-5% dividend yields.


Vietnam has been seeing the benefits of manufacturing moving out of China with its favourable government policies to attract businesses. The reopening after the pandemic has also been brought back tourism and consumption growth. In addition, Vietnam is the only food exporter in the region, making it less vulnerable to the global rise in food prices. Headline inflation still remains at sub-3% levels, and it is unlikely to go above 5% despite upside risks.

Key sectors: manufacturing, solar and wind energy, food and agribusiness


Jakarta stock exchange has seen the biggest gains so far this year in Asia, up over 7% as Q1 corporate earnings were among the strongest in Asian markets. We attribute our bullishness on Indonesian markets to favourable demographics, abundant natural resources and a strong reform progress under President Joko Widodo on improving bureaucracy, boosting the infrastructure and the ease of doing business. Indonesia is a net commodity exporter, but a net oil importer. Therefore, it has benefited from the surge in prices of its main commodity exports (coal, palm oil, nickel, natural gas), helping to offset higher crude oil import costs. Many EV manufacturers are also looking to move their manufacturing units to Indonesia to be closer to the battery minerals. Meanwhile, inflation threat in Indonesia has been rather restrained, so the pressure on Bank Indonesia to hike rates is limited, and the rate hikes won’t necessarily need to be in step with the Fed.

Key sectors: infrastructure, materials, fintech


India remains key in many investor portfolios due to its favourable demographics, rapid urbanisation and digitalisation. Regulatory oversight in India, compared to China, is more consistent and predictable, although not as entirely business-friendly. Any further progress on land and labor reform will provide further impetus to India’s favourable business climate. Despite inflation running higher than the central bank’s target, and the Reserve Bank of India’s tightening will mean a short-term pain in the markets, but these can be looked as buying opportunities for the high-growth potential in the long run. This stems from India’s focus on expanding manufacturing and innovation, along with the further potential to broaden the use of digital technologies. Lastly, as global stagflation/recession concerns pick up, there is bound to be more demand for India’s outsourcing services.

Key sectors: tech (health tech, fintech), private banks, infrastructure


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

Saxo Markets
40 Bank Street, 26th floor
E14 5DA
United Kingdom

Support Centre
For existing clients, please click here to request support via the Support Centre.

Have a question about our products, platforms or services? Visit the Support Centre to find answers for our most frequently asked questions. If you are still unable to locate an answer to your question, you will also find contact details for your local Saxo office to speak with a representative.

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.