Benefiting from favourable interest rate policies, attractive valuations and the possibility of a soft landing in the US, the region offers a compelling case for growth-oriented investors.

Already, in anticipation of this development, the MSCI's dollar-denominated ASEAN index surged 13% in the last three months, far outpacing the S&P 500's 4.5% gain. This increase reflects the impact of strengthening Southeast Asian currencies as well as climbing stock prices.

Recent data from Malaysia shows real GDP growth of 5.9% year-on-year for the April-June quarter. This surpassed expectations and marked the highest growth since late 2022. Vietnam, the Philippines and Thailand are also experiencing accelerated growth.

Looking ahead to 2025, the International Monetary Fund's World Economic Outlook forecasts U.S. growth to slow to 1.9%. This compares with the much higher projected growth rates of 4.4% for Malaysia, 5.1% for Indonesia and 6.2% for the Philippines.

Overall, FDI in ASEAN's 10 member nations reached a record $230 billion in preliminary figures for 2023. Indonesia has seen increased investment in electric vehicles and EV batteries, while Malaysia and Singapore have seen robust spending on semiconductor devices and data centres. Meanwhile, Samsung Electronics has actively invested in Vietnam.

As a further benefit, Southeast Asia continues to profit from friend-shoring, as global supply chains shift to more geopolitically neutral countries amid Sino-American tensions and as a result of the trend towards higher tariffs on Chinese exports to the U.S.

In recent conversations with local fund managers and family offices across ASEAN, many expressed strong optimism for local equities and fixed-income, with some even suggesting we could be entering a golden age for private equity and venture capital in the emerging Asian markets. Their message was clear: “Don’t miss this opportunity!”

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