SINGAPORE: Southeast Asian equities have risen more than 20% from recent lows, tracking global peers, with consumer stocks recovering as the coronavirus pandemic shows signs of slowing down.
This marks an about-turn for Southeast Asia, whose shares were some of the worst-hit in the sell-off triggered by the virus because of the region’s heavy reliance on trade and tourism with China, as well as its open capital accounts. “Optimism now is driven by tapering off of Covid-19 cases in Europe and signs of that happening in parts of the US,” said Daryl Liew, head of portfolio management at Reyl & Cie in Singapore, adding that there has been short covering as well. “But as you can see in Asia, the risk of a second wave is a real threat. It means restrictive measures may have to stay in place longer which will hurt the real economy. It’s too early to call a bottom.