22 April 2016
OTG: ASEAN – Lining up the Bulls and the Bears
By Standard Chartered Bank
The Standard Chartered Global Research team conducted annual briefings in five ASEAN cities in January. Besides presenting our 2016 outlook, we took the opportunity to poll our clients on their views and sentiment (refer to the Standard Chartered Research website for publications on individual country polling results).
A key takeaway is that growth expectations for ASEAN are mixed. Sanguine growth expectations for ASEAN appear almost out of place compared to global financial market sentiment. Although we believe ASEAN will not be insulated from a global slowdown, we think it will continue to outperform other regions such as Latam.
Client sentiment appears largely in line with our expectations. We expect ASEAN growth to be slightly better, but still below trend, this year, driven by domestic factors. Optimists outnumber pessimists in three ASEAN countries – Vietnam, Indonesia and the Philippines. Pessimists outnumber optimists in Thailand and Malaysia.
We expect stronger growth in Vietnam (2016: 6.9%; 2015: 6.7%) and Indonesia (2016: 5.2%; 2015: 4.8%), but a slightly worse, albeit still strong, year for the Philippines (2016: 5.7%; 2015: 5.8%). Our forecast for stronger growth in Thailand (4.0%; 2.9%) differs from negative client sentiment. We expect weaker growth in Malaysia (2016: 4.7%; 2015: 4.9%). We believe, however, that our clients are excessively bearish.
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