BNP Paribas, HSBC and Foreign Trade Bank issued 2021 economic outlook reports this week. They believe that there will be mild inflation in 2021 and the stock market may be bumpy this year, but it is a good opportunity to enter the market. Asia has become the target market of the three foreign banks, mainly due to optimism about the added value of Asian manufacturing supply chain competitiveness and the weakening of the US dollar.
Firstly, HSBC, BNP Paribas and BNP Paribas are optimistic about Asian stocks and bonds. There are three reasons: ultra-loose global monetary policy, weaker U.S. dollar and China’s strong recovery. Among them, HSBC Bank expects that China’s GDP will rebound sharply from the estimated growth rate of 2.3% in 2020 to 8.5% in 2021, driving the recovery after the Asian epidemic to be ahead of other global markets.
Secondly, they are further optimistic about emerging Asian markets. BNP Paribas is particularly betting on China, Taiwan and Japan in emerging Asia. HSBC is optimistic about China, and VNB is optimistic about China, Taiwan and Vietnam.
Investment stocks that can enter the market for the third call. HSBC Bank is optimistic about the Asian supply chain, including electronic and mechanical products, and that the RCEP agreement can optimize the supply chain in Northeast Asia and Southeast Asia. In addition, it is optimistic about the structural growth prospects of leading companies in e-commerce, online education, financial technology, online entertainment and food delivery.
Among the digital users, HSBC Bank pointed out that in response to the impact of the epidemic lockdown measures, Southeast Asia has shown significant growth in digital consumption this year. In 2020, Southeast Asia will add 40 million Internet users, of which one-third of digital service users will consume online for the first time due to the epidemic. Therefore, we are optimistic about the e-commerce companies in the ASEAN region. BNP Paribas names small and medium-sized stocks. In addition, it is also recommended to include alternative investments such as real estate, infrastructure, and hedge funds.
In terms of investment allocation, BNP Paribas recommends 60% stocks, 40% fixed income and 5% gold.
Finally, for the dollar trend. BNP Paribas is optimistic about the weak U.S. dollar and puts forward the following reasons, including: 1. Although the U.S. 10-year interest rate has risen, the two-year U.S. debt has not fluctuated much, which is still unfavorable to the U.S. dollar; 2. The end of major political risk events, such as Brexit, etc.; 3. Risk sentiment usually leads to the weakening of the dollar.
Regarding the decline in US stocks and Asian stocks, BNP Paribas said that in the past two days, it has been adjusted for multiple retracements and has nothing to do with fundamental factors. The decline in the past two days was a good investment opportunity.