Asian firms continued to receive earnings upgrades in July, highlighting sustained hopes of a recovery and optimism that equity prices will be bolstered in the second half of this year.
Goldman Sachs, which expects 35per cent EPS growth for MSCI Asia Pacific ex-Japan this year, said continued robust sales growth and margin recovery will be the drivers of stronger earnings. Australian companies led the region's upgrades in July as analysts raised their forward 12-month profit estimates 11.5per cent.
"Japanese corporates have piggy-backed on the back of rising global trade. There are still potential upside surprises from inventory restocking, an upswing in global capex and a very sharp turn-around in European growth," brokerage Jefferies said in a report. The earnings upgrades also came on the back of solid second-quarter results posted by Asian companies so far.