Month after month of dismal economic data has given way to signs that the global downturn is finally coming to an end. Singapore has emerged from a recession in the second quarter after four straight quarters of contraction. China seems poised for a recovery, as the emerging powerhouse continues to churn out figures that are increasingly “less bad”.
Shane Oliver, head of investment strategy at AMP Capital Investors, is looking for opportunities against the backdrop of positive economic data.
“Investors need to look hard at shares because as we go through the final part of year, we will get more and more evidence the economy is recovering,” he said on CNBC Asia Pacific’s Protect Your Wealth. “It (the correction) could go on for a few weeks or months, it will be a volatile patch, but come October markets could be well and truly be in an upswing.”
Oliver favors a mix of defensives and cyclicals, and has set his eyes on financials, as he explained: “Financials were hard hit by problems in the later part of last year. Most Asian financials are in reasonably good shape fundamentally but they are still looking quite cheap.”
Consumer discretionary stocks rank high on his radar. He said this sector has the potential to drive the rebound in Asian equities, given that consumer spending will pick up pace along with a global economic recovery.
Oliver also counts investment grade corporate bonds and commodity currencies as a vital part of his investment strategy.
“There is a strong case to have currencies in a portfolio, for example the Aussie, as the global recovery will be driven by demand in Asia and the demand will be commodity intensive,” he said.
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Catch "Protect Your Wealth" on CNBC's Asia Pacific network every Tuesday on "CNBC's Cash Flow," Wednesday on "Asia Squawk Box" and Thursday on "Capital Connection."
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