After five years of steep earnings downgrades in Asian equities, we are now seeing encouraging signs this trend is abating, writes BlackRock's Andrew Swan.
While this might partially be a reset of prior expectations that were unrealistically high (be it in the form of reform potential in India, or the take-off of Chinese internet companies), it has also been a welcome indication that companies are starting to be more disciplined around capital expenditure and returns on equity. Coupled with early signs of a pick-up in demand, it makes us more optimistic that we will reach a more balanced supply/demand environment, which should translate to an improved Asian corporates' pricing power in the long run. Why China's slowing growth poses risk ...
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