JPMorgan strategist on the best time to buy Asia stocks

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SINGAPORE — The best time to buy Asia stocks could be now, a JPMorgan strategist said Wednesday.

Mixo Das, Asia equity strategist at the bank, said U.S. markets have been hitting record levels while Europe and Japan are approaching their all-time highs. However, Asian markets have not seen the same trend.

“Ever since the highs in February we’re down quite a bit in Asian equities and the way we look at it is, our framework is telling us that now is probably the best time to be taking risks in Asia,” he told CNBC’s “Squawk Box Asia.”

Das said investor positioning in Asia is currently “extremely, extremely light” while valuations have come down to more normal levels. If macroeconomic momentum in the region starts to stabilize, Asia stocks could move a lot higher, he added.

The strategist said second-quarter corporate earnings in Asia could grow 60% to 70% from a year ago — broadly in line with estimates.  

Covid and vaccination effect

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But the spread of a more transmissible delta variant and relatively low vaccination rates across Asia could weigh down stocks that would benefit from economic reopening, said Das. Such stocks include those in the hospitality, leisure and travel sectors, he said.

The strategist added that JPMorgan prefers stocks that are sensitive to changes in interest rates, such as banks. His comments come as the U.S. Federal Reserve raised its expectations for inflation and brought forward the time frame on when it will raise rates.

Chinese technology stocks

On opportunities in China, Das said technology stocks are still a “buy” for investors with a long-term horizon. He explained that Chinese tech companies still have prospects to grow, even though the pace of growth could slow down due to tighter regulatory scrutiny by Beijing.

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