AI, yen are among hotspots to watch in Asia this earnings season
- The MSCI Asia Pacific Index is expected to see its first year-on-year profit growth in eight quarters, with earnings per share rising 4.1 per cent for the March quarter
- Corporate profit growth appears to be accelerating, creating a favourable view of the outlook for Asian equity markets, Dalma Capital’s Gary Dugan says
Asia looks ready to turn a corner in quarterly earnings growth this results season, and traders are focusing on key themes to make the most of the opportunity.
The biggest topics include the sharp growth in megacap technology profits, the continued boom in artificial intelligence and improving Chinese payouts. Investors are also watching how earnings in Japan get impacted by the yen’s sharp depreciation while searching for new winners in India’s pricey market.
The MSCI Asia Pacific Index is expected to see its first year-on-year profit growth in eight quarters, with earnings per share rising 4.1 per cent for the period ended March, according to data compiled by Bloomberg. Technology stocks are expected to lead the growth, while utilities are poised to see a turnaround.
“Corporate profit growth appears to be accelerating, creating a favourable view of the outlook for Asian equity markets if based purely on the region’s fundamentals,” said Gary Dugan, chief investment officer at Dalma Capital Management. “However, the challenge of high US rates and a strong dollar could delay the rally.”
Here’s a look at five key themes to watch as earnings reports roll in over the next few weeks.
AI boom
