Asia stock markets are looking to close the year with a positive outlook on the back of year-end rally, boosted by coronavirus vaccine optimism and a glimpse of economic recovery from the pandemic earlier this year. Still, Goldman Sachs, Citigroup and Nomura see 20% earnings growth for Asian shares next year.
Leading financial firms namely, Goldman Sachs Group, Citigroup and Nomura Holdings forecasted more than 20% in earnings growth for Asian shares next year. Citi and Nomura expected a rise between 5-7% in the MSCI Asia ex-Japan Index. Meanwhile, Goldman estimated a 9% increase in the Asia Pacific equivalent in 2021.
“We remain optimistic about 2021 prospects driven by the macro and earnings recovery and would be buyers of any market pullbacks,” Goldman’s strategists including Timothy Moe wrote in a note.
“With strong market returns this year and full valuations, the market has priced next year’s earnings recovery: 2022 earnings will be the primary driver of 2021 returns,” added Goldman, expecting a 16% growth for Asia in 2022.
Frank Benzimra, Head of Asia Equity Strategy of Societe Generale, pointed out that sector-wise, earnings growth is shifting to cyclical sectors, such as materials and financials.