RFi Group Insight - Asia: Getting Ready for the new year

As we look back at 2017, it was quite the bull year as both traditional and new age assets provided healthy returns to investors across the world. Asia was no exception, as shares, property, and digital assets appreciated throughout the year. The cryptocurrency space drew global headlines with governments’ efforts to curb the speculative nature of trading, a part of many investors’ barbell strategy.

Equities, the most commonly held asset across Asia took the front seat in providing a gateway to blue chips contributing to most of the major indices across Asia making noticeable gains over the year. Hong Kong’s Hang Seng Index finished up 36% for the year, driven by Tencent’s performance as it briefly eclipsed Facebook’s valuation in November.

Despite geopolitical tensions between North Korea and Trump’s administration, South Korea’s Kospi index also charged ahead and was up 22% for the year, as its exports benefited from the global economic recovery. Vietnam’s 47% surge tops the emerging Asian countries, as we saw some major brands such as Petrolimex, Vietnam Airlines, Vincom Retail and VPBank make their debut with their initial public offerings.​


When we look at property prices, Bank of Thailand has made a warning on Thailand’s property bubble which has seen many Asian, especially mainland Chinese investors buying up property in search of capital gains and rental yields. Vietnam has seen property prices increase in the mid to high-end apartments as it saw 68,000 successful transactions, which is a significant increase from 2016. In the Philippines, we’ve seen strong investment inflows that have trickled to the real estate market as property prices have increased, especially for the luxury sector and many expect a stronger 2018 with infrastructure improvements.

"In the Philippines, we’ve seen strong investment inflows that have trickled to the real estate market as property prices have increased, especially for the luxury sector and many expect a stronger 2018 with infrastructure improvements."

Lastly, we saw the explosion of cryptocurrencies as unprecedented gains were made in the price of bitcoin, now a household name across many countries in Asia. South Korea became the second largest market for cryptocurrency trading drawing popularity among housewives and students which led to regulations clamping down on trading by minors and foreigners. Recently published data from the South Korean Financial Supervisory Service (FSS) showed banks earned 36 times more income from facilitating cryptocurrency trade than in the previous year. Indonesia’s central bank also issued warnings, leading to a blanket ban, on cryptocurrency investments due to the speculative nature as investors have seen the price of bitcoin multiply 16-fold over the course of the year.


With a surge in the valuation of multiple asset classes across Asia, it is no wonder that investor sentiment has improved greatly over the last 12 months. Led by Hong Kong, RFi Group data shows that the percentage change of its investment sentiment index has increased in all the countries in its study scope, with the investment sentiment measured as the net difference between the percentage of consumers looking to invest more and those looking to invest less in the coming 12 months.

With consumers’ increasing wealth, there will undoubtedly be a huge opportunity for banks to profit from the facilitation of investments. Though it may be difficult to reproduce the results of 2017, there will be a flow-on effect into 2018 and banks need to be ready to be the provider of choice for transactional and wealth banking for the increasingly affluent in Asia.

"LED BY HONG KONG, RFI GROUP DATA SHOWS THAT THE PERCENTAGE CHANGE OF ITS INVESTMENT SENTIMENT INDEX HAS INCREASED IN ALL THE COUNTRIES IN ITS STUDY SCOPE, WITH THE INVESTMENT SENTIMENT MEASURED AS THE NET DIFFERENCE BETWEEN THE PERCENTAGE OF CONSUMERS LOOKING TO INVEST MORE AND THOSE LOOKING TO INVEST LESS IN THE COMING 12 MONTHS."
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