Macroeconomic update: Asia

This article was produced by ELITE Connect and originally published on the ELITE Connect platform

In the last in our series of regional macroeconomic updates, we hear from Hannah Yulo, chief investment officer and senior vice president for corporate finance at the DoubleDragon Properties Corp. She outlines her views on the current Asian macroeconomy and shares her advice on how IROs can best work within the changing landscape to maximize investor engagement and minimize any negative impact.

ELITE Connect: What do you feel are the main macroeconomic issues in Asia at the moment? 
Hannah Yulo: I think spurring population growth and strong consumption from the emerging middle class are fuelling a rapid increase in GDPs. This is what makes the Asian story so compelling, but it also means it has become increasingly important to ensure we are able to sustain this type of growth, given the finite resources available, to avoid a degradation in the standards of living in general. Countries must plan well, and far ahead, on how they intend to sustain the evolution of their economies so they avoid a situation of high inflation, health issues and inadequate infrastructure. 

EC: How has the Asian macroeconomic landscape changed over the past 12 months?
HY: Asia still remains the driving force behind the growth of the global economy, although this has rather tapered off because of somewhat sluggish performance from China. There has definitely been an apparent tightening in global financial conditions, coupled with a slowdown in global trade, which is forcing economies to become more reliant on domestic demand. 

EC: How are these issues affecting IR activity?
HY: I believe a lot of investors are taking the ‘wait and see’ stance and have become a lot more risk-averse, especially due to the major shifts in global power and other political factors that have been affecting not only the region, but also economies across the globe. There is still a lot of uncertainty in the market and we are looking forward to the situation settling down soon.

EC: In your experience, how can IROs best deal with macroeconomic issues in Asia?
HY: These are issues that are clearly beyond our control so it is important to highlight the fact that Asia is still the fastest-growing economy in the world and that economic indicators remain promising. The focus should be less on the uncertainties and more on the ability of fundamental investors to capitalize on the value proposition of strong companies whose growth prospects have not changed.

Investors should see opportunity in times like this and keep in mind what the real drivers are behind the growth of each business, or each country, for that matter. If these factors are intact, investors should be assured of continuous growth, regardless of global uncertainties.