The best markets to buy in Asia
On 24 October 2020, Alibaba founder Jack Ma gave a now-infamous speech, criticising Chinese regulators for stifling innovation and calling for reforms. Since then, the Chinese internet sector is down by 60% – and by 72% from its subsequent peak high in February 2021. The extent of the collapse is in line with the slump in the Nasdaq in 2000 as the first internet bubble burst. In that case, the Nasdaq didn’t bottom until late 2002, but the subsequent returns have been dramatic. The best stocks are up by eye-watering amounts. Amazon has risen 55,000% since March 2001. Could there be similar opportunities today in the Chinese tech sector?
On the flip side, the best-performing large equity market in the world since the pandemic lows in March 2020 is not the S&P 500 or the Nasdaq, but India’s Sensex. This may come as a surprise: India did not have the resources to follow a Western or Chinese approach to the pandemic, and its economy has historically been adversely affected by a high oil price (the government subsidises the retail gasoline price and thus faces significant fiscal restraint with high oil prices). Does the Sensex’s unexpected strength so far and the extreme dichotomy in performance between Chinese and Indian shares present an opportunity to switch?
Missteps and new directions
Chinese weakness is not solely about tech
