Multi-Asset Perspective – Mar 2024


In China, company earnings are bottoming, and macro data are gradually improving. Separately, the country’s Two Sessions revealed economic targets that are largely in line with market expectations. Market sentiment has bottomed with a gradual U-shape recovery.

Meanwhile, the strong demand for related artificial intelligence (AI) and the recovery of non-AI tech continues to be a theme in Asia, especially for the tech-heavy markets of Korea and Taiwan.

Key indicesFebruary 2023 performanceYTD performance
MSCI AC Asia ex-Japan Index (in USD)5.60%-0.16%
MSCI China Index (in USD)8.39%-3.11%
CSI 300 Index (in CNY)9.35%2.48%
Hang Seng Index (in HKD)6.63%-3.14%
Taiwan Stock Exchange Index (in TWD)6.02%5.85%
MSCI Taiwan Index (USD)5.45%4.21%
JPM ACI China Total Return Index (in USD)0.14%0.85%
JPM Asia Credit Total Return Index (in USD)0.09%0.36%

Source: J.P. Morgan, MSCI, Morningstar, Data as of 29 February 2024 

China/Hong Kong equities

  • The market has adjusted its rate cut expectations to be more aligned with the Fed’s dot plot as the economy remains strong. Treasury yields will likely stabilize around the current levels. After the Q4 earnings season, the US equity market is expected to be range-bounded, shifting away from the Magnificent Seven stocks to the broader market and paying more attention to the upcoming economic data and FOMC meeting.
  • In China, the Two Sessions has revealed economic targets close to market expectations. The most positive is the issuance of RMB 1 trillion in ultra-long special central government bonds. However, the market needs more details about fiscal and monetary policy support. On the other hand, the property market continued to be weak, and consumption started to slow again after the Chinese New Year. Given the stronger global macro backdrop, exports will likely resume growth this year. Market sentiment has bottomed with a gradual U-shape recovery.
  • The Hong Kong budget has removed all the restrictions on the property market imposed in the last 10 years and decreased mortgage down payments. This will help stabilize the market; however, given the weak economy and market sentiment, the recovery will be slow.

China A-shares

  • The A-share market has stabilized, thanks to the national team’s buying support – albeit at a slower pace compared to the last two months – and to stricter controls on quant funds and the banning of short-selling in some areas. Foreign inflows have also started to come back. Company earnings are bottoming. Momentum and macro data are improving.

Asia ex-Japan equities

  • Many Asian countries have held interest rates interest rates and await for the Fed to start the cut before they move. Banks in the region, particularly Southeast Asia, generally have lower NIM but enjoy healthy loan growth as the domestic economies remain strong.
  • Learning from Japan’s experience, South Korea is proposing the Value-Up program, aimed at boosting stock market valuations, which are considered very low relative to global peers, often referred to as the “Korea discount”. However, we believe this would be a long process for this to be implemented successfully.
  • Taiwan remains strong, driven by strong AI demand and recovery of non-AI tech. However, valuations are expensive compared to history, although these are mainly driven by a group of high-growth companies.

Emerging market ex-Asia equities

  • As the global economy strengthens and US Treasury yields stabilize, emerging markets will continue to grow, along with their improving domestic economies. However, valuations are also a bit stretched.

Japanese equities

  • March is a critical month for wage reform and the BOJ to guide its policy direction. With CPI in January exceeding expectations, a lot of attention is paid to the timing of the ending of the negative interest rate policy.
  • As many companies use 144 JPY per dollar as their currency assumption in their earnings expectation, a stronger JPY will be a headwind to the earnings outlook. After the Nikkei 225 broke the all-time high and 40,000 mark, momentum started to fade.

Asia investment grade bonds

  • Asia investment grade bonds continued to attract inflows due to their attractive yield levels and negative net issuance. Credit spreads remain stable at already tight levels. US Treasury yields are likely to stabilize around the current levels, given the market has adjusted its rate cut expectation to be more realistic.  Asian investment grade bonds will remain stable, mainly for carry.

Asia high yield bonds

  • Activities in Asian high yield bonds have become more active as spreads continue to stay above the average. There are signs of some high yield issuers coming back to the market after a very long pause, which is a healthy development for the Asian high yield market.
  • However, the market is chasing a few names, causing a narrowing of breadth in the market.

Emerging market debt

  • Spreads have become even tighter. However, demand remains strong. With a soft landing backdrop in the US, emerging markets are expected to deliver stronger growth as fundamentals in EM bonds continue to improve.


  • Gold prices broke their historical high again after some correction, as the market is now clearer on the rate cut path. Another reason is Bitcoin breaking an all-time high, which has some effect on Gold.
  • However, as the surge is very rapid, similar to the previous rounds, some correction is imminent. That said, the asset class remains a good geopolitical hedge in the medium to long term.


A multi-asset strategy offers lower volatility compared to traditional single-asset or balanced portfolios. However, the correlation between risk assets, such as equities, credits, and commodities, has recently increased dramatically. In an uncertain environment with low yields, income becomes an essential source of return for investors.

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The views expressed are the views of Value Partners Hong Kong Limited only and are subject to change based on market and other conditions. The information provided does not constitute investment advice and it should not be relied on as such. All materials have been obtained from sources believed to be reliable as of the date of presentation, but their accuracy is not guaranteed. This material contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Investors should note that investment involves risk. The price of units may go down as well as up and past performance is not indicative of future results. Investors should read the explanatory memorandum for details and risk factors in particular those associated with investment in emerging markets. Investors should seek advice from a financial adviser before making any investment. In the event that you choose not to do so, you should consider whether the investment selected is suitable for you.

This article has not been reviewed by the Securities and Futures Commission of Hong Kong. Issuer: Value Partners Hong Kong Limited.