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Malaysian Reserve
14-05-2025
- Business
- Malaysian Reserve
India is now most favored Asian stock market, BofA survey shows
INDIA has replaced Japan as fund managers' top Asian stock market pick, as the South Asian nation is likely to benefit from supply chain shifts amid global trade tensions, according to BofA Securities' latest monthly survey. In the fund manager survey, 42% said they are overweight on India, followed by 39% for Japan, and 6% for China. Thailand fared the worst. A total of 109 panelists with $234 billion of assets responded to the survey's regional questions. 'India emerges as the most favored market, perceived as a likely beneficiary of the supply chain re-alignments following the effects of tariffs,' strategists including Ritesh Samadhiya wrote in a May 13 note. 'In India, infrastructure and consumption continue to be the primary themes that investors are keenly monitoring.' The findings support recent market trends in India, where stocks have rebounded since President Donald Trump's chaotic tariff rollout on April 2. The tariff-driven volatility in global markets has driven investors to deem India as a relative haven given its heavier dependence on domestic consumption over exports. India's stock benchmark, the Nifty 50 Index, has outperformed many of their Asian peers, with only Japan and Indonesia exceeding its performance since April 2. The Indian market has been pressured recently by a conflict with neighbor Pakistan, following an April 22 attack in Kashmir that killed 26 civilians. The countries agreed to a ceasefire on May 10, triggering a spike in their equity markets when the market opened this week. Indian companies' first-quarter earnings are also pointing to an improved outlook. Local stocks may rise another 7.6% from the current level by the end of the year, and analysts will largely cease downgrading their earnings, Sanford C. Bernstein strategist Venugopal Garre said in a report. 'We believe the markets are positioned well,' Garre said, citing improved liquidity, tax cuts and rural demand among the drivers. –BLOOMBERG
Mint
14-05-2025
- Business
- Mint
BofA Survey: Fund Managers favour India over Japan, China for equity exposure
India has emerged as the most preferred equity market in the Asia Pacific region, according to the latest Fund Manager Survey (FMS) by BofA Securities. Backed by positive sentiment around infrastructure development, strong consumption trends, and ongoing supply chain realignments, Indian equities have overtaken Japan to secure the top spot among fund managers. A net 42 percent of respondents in the BofA Securities' May survey favored India over other Asia Pac markets. Japan followed at 39 percent, while China, which had previously ranked lowest, climbed to third place with 6 percent preference. Singapore trailed at 3 percent, and Thailand remained the least favored market in the region. 'India emerges as the most favored market, perceived as a likely beneficiary of supply chain re-alignments following tariff effects,' BofA Securities noted in its survey findings. In terms of sectoral focus, infrastructure and consumption continue to dominate investor interest within Indian markets. The survey included responses from 208 global panelists managing $522 billion in assets under management (AUM). Of these, 174 participants with $458 billion in AUM responded to the global FMS segment, while 109 panelists with $234 billion AUM took part in the regional Asia Pac segment, covering the period between May 2 and May 8, 2025. The survey highlighted an improving sentiment around economic growth in the Asia Pac region. While 58 percent of fund managers still expect an earnings slowdown, the number has declined from 78 percent in the previous month, signaling a potential turnaround in outlook. Moreover, current earnings forecasts are not viewed as overly optimistic, suggesting possible room for upward revisions. Globally, pessimism is easing. A net 59 percent of fund managers still expect a weaker global economy, down from 82 percent last month. Meanwhile, 77 percent now forecast a softer Asian economy, compared to 89 percent in the prior survey. The mood on China has become increasingly constructive. Only 16 percent of respondents said they are actively seeking opportunities outside China, compared to 26 percent a month ago. In fact, a record 10 percent of participants reported being fully invested in the Chinese market. It is worth noting that the survey was conducted before the May 8 US-China meeting in Geneva, which was followed by an announcement regarding tariff reductions—potentially further boosting sentiment towards Chinese equities. In Asia ex-Japan portfolios, fund managers were seen overweighting telecom and software sectors, while underweighting energy, materials, and consumer discretionary (excluding retail and e-commerce). Sentiment towards the semiconductor sector has also improved, with only 42 percent now expecting a slowdown in the chip cycle—down from 59 percent last month. In Japan, banks continue to be the most preferred investment theme, supported by the backdrop of higher interest rates. Real estate has climbed to the second spot in terms of sectoral preference. Meanwhile, in China, investors favored themes around AI, semiconductors, and companies likely to announce buybacks or dividends. Overall, India's emergence as the most preferred equity market in Asia Pac underscores growing global investor confidence in its long-term economic fundamentals and sector-specific growth stories. With fund managers continuing to eye infrastructure and consumption as key themes, and broader regional sentiment improving, Indian equities appear well-positioned to attract sustained institutional flows in the coming months. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Business Standard
14-05-2025
- Business
- Business Standard
India most preferred Asia-Pac equity market: BofA Securities FMS survey
Indian stock markets are the most preferred in the Asia Pacific (Asia Pac) region, suggests a recent fund manager survey (FMS) done by BofA Securities. A net 42 per cent of the fund managers surveyed by them preferred India to other regions such as Japan (39 per cent), China (6 per cent) and Singapore (3 per cent). 'India emerges as the most favored market, perceived as a likely beneficiary of the supply chain re-alignments following the effects of tariffs. Japan relinquishes the top spot, while China rises to the third spot from the lowest rank in the previous month. Thailand remains the least preferred market,' BofA Securities' survey findings suggest. Also Read A total of 208 panelists with $522 billion worth of assets under management (AUM) participated in the survey. 174 panelists with $458 billion in AUM responded to the global FMS questions and 109 panelists with $234 billion AUM responded to the regional FMS questions between May 02 and 08, 2025, BofA Securities said. Economic growth outlook The turnaround in economic growth outlook has led to favorable market return expectations for the Asia Pac region. Although a net 58 per cent still anticipate an earnings slowdown, this reflects an improvement from 78 per cent the previous month. Furthermore, consensus earnings estimates do not appear overly optimistic compared to last month, allowing room for upward revisions in the future. Currently, a net 59 per cent of respondents anticipate a weaker global economy, a notable improvement from last month's most pessimistic reading of 82 per cent, while a net 77 per cent foresee a weaker Asian economy, improving from 89 per cent the previous month. Tide turning for China Investors are turning optimistic on China, BofA Securities said, with only 16 per cent seeking opportunities in other markets, compared to 26 per cent last month. Also, a record 10 per cent report that they are fully invested in China. It is important to mention that the survey was completed on May 8, prior to the US-China meeting in Geneva, which was followed by a swift announcement regarding the reduction of tariffs. In the Asia ex-Japan portfolio, fund managers are overweight telecom and software, while avoiding energy, materials, and consumer discretionary ex-retailing/ecommerce. The outlook on semiconductors, BofA said, has improved compared to April, with net 42 per cent expecting a softening in the semiconductors cycle, a decrease from 59 per cent last month. In Japan, banks, beneficiary of higher rates, continue to be top choice, BofA said, while real estate has risen to second place. In China, the most favored themes are AI/semiconductors and shares of companies that are likely to announce buybacks / dividends.
USA Today
04-03-2025
- Automotive
- USA Today
Rivian stock soars 40% from April 2024 lows: Is it a buying opportunity?
Rivian stock soars 40% from April 2024 lows: Is it a buying opportunity? Despite short-term volatility, Rivian may be an impressive EV stock in the coming months. Share prices of electric vehicle manufacturer Rivian (NASDAQ: RIVN) are up almost 40% from their all-time low in April 2024. Although an impressive run-up, it is still nearly 36% lower than its 52-week high of $18.11 in July 2024. Rivian came out with a strong performance in the fourth quarter of 2024 on Feb. 20, reporting positive gross margins for the first time. Despite the excitement about Rivian's margins, the company's share prices did not experience any positive impact. Investors remain concerned about the company's weaker-than-expected delivery outlook for 2025. Rivian expects between 46,000 and 51,000 vehicle deliveries for 2025 — including a slower start of about 8,000 deliveries in the first quarter. This is lower than the 51,579 vehicle deliveries in 2024. Furthermore, Wall Street was expecting 55,000 vehicle deliveries in 2025. Shares of the EV start-up tanked by 7.8% on Feb. 24 and by another 4.3% on Feb. 25 after BofA Securities' analyst John Murphy downgraded the stock to "underperform" from "neutral" and reduced the target price by 23% to $10. Murphy has expressed worries about increasing competition in the EV space, slowing EV demand, and changing regulations related to EV adoption. So, the question is now: Is this share price correction a buying opportunity, or is the Rivian stock still trading at unsustainable levels? Let's assess some important trends for this EV player, and what they can eventually mean for the company's share price trajectory in the coming months. Improving financials Rivian's first-ever positive gross margins are a direct result of a dramatic $31,000 reduction in the cost of goods sold (COGS) per vehicle in the fourth quarter compared to the same quarter of the prior year. The company has introduced engineering-driven design changes to boost performance, reduce costs, and improve ease of manufacturing and servicing in the second-generation R1 platform. Furthermore, the company is committed to optimizing its manufacturing processes through line balancing, robotics, automation, increasing operator efficiency and logistical optimizations. Besides cost savings, Rivian demonstrated an increase in automotive revenue per unit (excluding regulatory credit revenue) to $86,000, thanks to an improvement in the sales mix toward R1 vehicles with a higher average selling price. R2 platform launch Rivian is gearing up to launch R2 vehicles in the first half of 2026. The bill of materials costs almost half, and the non-bill materials cost significantly less in R2 compared to the company's flagship R1 vehicle. With 95% of the bill of materials already sourced, R2 deliveries are less likely to be affected by commodity shortages. R2's starting price of $45,000 is also nearly half of R1's average selling price, which exceeds $90,000. The more economically priced R2 is thus expected to expand the target addressable market for Rivian. AI autonomy Rivian has also been focused on developing cutting-edge AI-powered autonomous driving capabilities. The Gen 2 vehicle platform on R1 consists of an impressive sensor suite that feeds inputs into an advanced computing platform. Rivian uses real-time driving data and simulations to train its autonomous driving system offline. The improvements are then deployed in new vehicles. This has helped create a virtuous data flywheel effect, wherein real-world driving experiences are used to improve the system. Rivian is gearing up to launch increasingly advanced autonomous features, such as a hands-free highway feature and an eyes-off highway feature. The company plans to allow for more use cases, including roads and types of conditions for which these hands-off and eyes-off features can be deployed. Furthermore, CEO RJ Scaringe expects Rivian's existing hardware to support even more sophisticated capabilities through software updates. What next? While the EV industry is subject to regulatory uncertainties and supply chain disruptions, Rivian's improving fundamentals offer hope. History shows that EV stocks continue to recover in cases they demonstrate sustained improvement in margins, production capacity, and vehicle delivery numbers. This is evident from Tesla's case, which saw dramatic share price declines in 2020 and 2021 but has since managed to win investor confidence in improving fundamentals. Similarly, Rivian stock may also surge significantly higher in the coming months. In the fourth quarter, Rivian produced 12,727 vehicles and delivered 14,183 vehicles. With deliveries exceeding production, the company has been focused on reducing inventory levels in 2024, thus generating cash from working capital. Furthermore, while the delivery targets in 2025 are somewhat conservative, that can be attributed to the company's requirement to shut down consumer and commercial manufacturing lines at their Normal, Illinois, plant for nearly one month in the second half of 2025 to prepare for the launch of R2 in 2026. This is mostly a temporary challenge and will be resolved by the end of 2025. The company also plans to increase production levels in the first and second quarters of the fiscal year 2025 to build inventory, which, in turn, can partly mitigate the impact of the plant shutdown. It is undeniable that Rivian is a highly volatile stock, sensitive to negative news about missed production targets, supply chain challenges, intensifying competition and overall EV market dynamics. Hence, it is imperative that investors closely monitor the broader EV landscape to avoid cases like Nikola, wherein the stock crashed after a significant rally due to deteriorating fundamentals. Rivian is trading at 2.6 times sales, far lower than its historical three-year average multiple of about 64. Considering Rivian's current fundamentals and cheap valuation, long-term investors with above-average risk appetites can consider buying a small stake in the stock on the current dip. Investors can also practice a dollar-cost averaging strategy to participate in the upside of the stock while controlling overall risks. Manali Pradhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy. The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY. 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