Asian Investors Betting On Trump Focus On Trade War Winners
Investors across Asia stepped up bets on the likely winner of Donald Trump’s imminent return to the White House, sending some hot stocks soaring.
The Republican candidate’s election victory sparked a rally in South Korean shipyards, Indian electronics manufacturers, Australian steel suppliers and even a Vietnamese industrial complex. The common thread: the belief that these companies could benefit from tighter restrictions on global trade, which would shrink supply chains but create opportunities for nimble companies.
The rise in share prices highlights the piecemeal approach some investors in the region are taking ahead of a second Trump term, in contrast to the broad macro push for a “Trump trade” immediately after the election.
“Some emerging market investors are starting to look beyond a top-down approach to Trump’s business and present specific opportunities to generate alpha,” said Nirgunan Tiruchelvam, an analyst at Alethea Capital in Singapore, adding that “a sector-centric narrative is taking effect.” ”
South Korean shipbuilder Hanwha Ocean Co. rose 30% over the past two days, while HD peers Hyundai Heavy Industries and Samsung Heavy Industries also gained. The buying spree was fueled by a call between Trump and South Korean President Yeon Seok-yeol, in which the president-elect expressed hope for closer cooperation with the Asian country.
Hanwha Ocean is buying a former naval shipyard in Philadelphia and recently won the first South Korean contract to refit U.S. Navy ships. These factors could calm investors who are concerned about the risks of Trump’s “America First” approach.
Sydney-listed BlueScope Steel Ltd. rose along with U.S. steelmakers, rising more than 5% for two days. The company derives nearly half its revenue from North America, primarily through its Delta, Ohio-based Northstar unit, which puts it in a good position to weather potential tariffs that could hurt the Australian economy.
Indian electronics makers Dixon Technologies India Ltd. and Cairns Technologies India Ltd. and Syrma SGS Technologies Ltd. rose more than 10% on Wednesday as local investors reacted to the possibility of a Trump win. 8.5%. Economists believe India will benefit from the evolving “China plus one” strategy as multinationals try to diversify their supply chains outside of China but not abandon them entirely.
“Tariff and tax risks are re-emerging,” said Charu Chanana, chief investment strategist at Saxo Markets. This could favor the beneficiaries of the China Plus One plan, especially India, which has significant structural advantages in demographics and infrastructure spending.
Companies adopting a “China plus one” strategy will also increase investment in Southeast Asia, Maybank Kim Eng Securities analyst Chuck Ryongsinpinya wrote in a Nov. 6 report.
The bets on these stocks are not all in one direction. Some big winners fell on Friday as investors remained cautious about the uncertainty facing Trump’s return to the White House.
But the moves suggest there is a sense among Asian investors that active stock pickers can still profit despite pessimism about the impact of trade tensions between the world’s two largest economies.
“Across Asia, sectors from defense to electronics are benefiting from the U.S. shift toward China,” said Billy Leung, investment strategist at Global X ETFs. “For me, this is not just a repositioning of the business, it’s a restructuring of the industry.”
