Global funds are showing growing interest in Southeast Asian stocks, particularly in countries such as Malaysia and Thailand.
This trend is driven by the expectation that the Federal Reserve (Fed) is soon expected to change its policy, favoring this market.
Four of the five best performing equity markets in Asia this month were from Southeast Asia, led by Thailand.
Foreign investors are seen to be drawn to the region because of supportive local policies, attractive stock valuations and opportunities in sectors such as real estate, technology and exports.
For example, the MSCI Asean Index is trading near its highest level since April 2022, making it attractive for investors.
Countries such as Indonesia, Malaysia and Thailand have introduced policies that encourage share ownership, thereby increasing investor confidence.
This has resulted in strong performance in sectors such as banking and property development.
Financial institutions such as Goldman Sachs and Nomura have increased their outlook for these countries.
If interest rates remain favorable, the rise in Southeast Asian stocks could continue until 2025.
