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·      Credit Suisse says Asian stocks will kick off an ‘earnings super-cycle’ in 2021

Asian stocks look set to outperform global markets next year as an “earnings super-cycle” is expected to kick off across the region, Credit Suisse said.

The Swiss bank has forecast 19% in U.S. dollar returns for the MSCI Asia excluding Japan Index between now and the end of 2021, compared with 15% globally.

“Asia ex-Japan is our biggest overweight globally,” Dan Fineman, co-head of Asia-Pacific equity strategy at Credit Suisse, said in a webinar Thursday that discussed the bank’s 2021 outlook.

Among Asian markets, Credit Suisse likes South Korea the most, forecasting an EPS growth of 43% in 2021.

“If you look at the Korean market and the Korean economy, it’s very cyclical. When you are expecting a global economic upturn, it’s a good time to be in Korea,” he explained.  

Other Asian markets that Credit Suisse likes are:

Hong Kong, which the bank said has “the best real estate outlook” in the region and the lowest risk of policy moves that could suppress the property market.

Singapore, which has a heavy presence of real estate and bank stocks — two of Credit Suisse’s current favorite sectors.

China, with favorable factors such as further strengthening in the Chinese yuan, stabilizing trade relations with the U.S. under a Biden presidency, and recovery in inbound foreign direct investments.

Thailand, which presents “the best potential turnaround story” especially in the second half of 2021.

Sector picks

In terms of sectors, Credit Suisse’s favorite is real estate given signs of recovery in some markets, especially Hong Kong. Property purchases could get a boost from low short-term interest rates — which most mortgages in Asia are priced against, said the Swiss bank.

Bank stocks in the region, which have been “very cheap,” will also benefit from improving global economic growth, said Fineman. But Credit Suisse would close its position on Asian banks once valuations catch up with the broader market, he added.

“I think there’s plenty of room left for banks to run even though they have been outperforming over the past month,” he said.

·         JPMorgan says emerging markets are ‘under owned,’ stocks could rally as much as 20%

JPMorgan says stocks in emerging markets may rise as much 20% in 2021 after being largely ignored by investors this year.

“I think emerging markets are very under owned as we see in the markets rally,” Joyce Chang, chair of global research at JPMorgan, told CNBC’s “Street Signs Asia” on Thursday.

·      Asian shares vault to record high as U.S. stimulus seen within reach

Asian shares scaled a record high on Friday on growing prospects of a large U.S. economic stimulus package, while hopes that coronavirus vaccine rollouts will boost the global economy underpinned investor sentiment.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.78%, surpassing its Nov. 25 peak, led by gains in the tech sector, while Japan’s Nikkei dipped 0.22% on profit-taking.

European stocks are seen mixed. Euro zone stock futures traded 0.14% lower while Britain’s FTSE futures were up 0.49%.

In New York, the S&P 500 erased earlier gains after the Wall Street Journal reported that Pfizer had slashed the target for the rollout of its COVID-19 vaccine due to supply chain obstacles

·      Nikkei slips from multi-decade highs on vaccine supply concerns

Japan’s benchmark Nikkei share average closed lower on Friday, retreating from a near 29-1/2-year high as risk sentiment soured after U.S. drugmaker Pfizer Inc said it had slashed the target for the rollout of its coronavirus vaccine.

The Nikkei share average fell 0.22% to 26,751.24, but posted its fifth consecutive weekly gain. In the previous session, the index settled near its highest since April 1991.

The broader Topix ended nearly flat at 1,775.94.

The market tracked the U.S. S&P 500 index, which fell from all-time highs on Thursday, after Pfizer flagged challenges in supply chain for the raw materials used in its vaccine..

·      China stocks post third weekly gains on recovery hopes

China stocks inched up on Friday to post a third straight weekly gain, buoyed by robust data pointing to a recovery in the world's second-largest economy, though the rally was capped by escalating Sino-U.S. trade tensions.

The blue-chip CSI300 index rose 0.2% to close at 5,065.92, while the Shanghai Composite Index advanced 0.1% to 3,444.58.

For the week, CSI300 strengthened 1.7%, while SSEC climbed 1.1%, both logging their third weekly gains in a row on upbeat data.

·      European markets mostly higher with U.S. stimulus, Brexit in focus

European markets edged slightly higher on Friday as investors monitor prospects of a U.S. stimulus package and a last-minute Brexit trade deal.

The pan-European Stoxx 600 gained 0.2% in early trade, with oil and gas stocks climbing 1.2% to lead gains while banks inched 0.3% lower.

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