The reporting season in Asia is in full swing. More than 70 percent of companies have now published their results for the fourth quarter of 2020. This was reported by Deutsche Bank in a recent newsletter.
Reporting season: Taiwan and South Korea ahead in profit growth
Despite a slight decline in profits compared to the third quarter, the figures so far can convince. On average, profits were 34 percent higher than in the final quarter of 2019.
While profit growth was particularly high in Taiwan at plus 66 percent and South Korea at plus 260 percent, Indonesian companies reported a halving of their profits on average.
In terms of sectors, healthcare at plus 105 percent, basic materials at plus 87 percent and IT companies at plus 77 percent reported the highest profit growth.
Chinese technology companies at a slight disadvantage due to strict regulations
The fact that the MSCI Asia Pacific ex Japan Index has been falling since mid-February despite the good results is mainly due to highly weighted Chinese technology companies. Although these companies also reported high profit increases, they are currently facing stricter regulatory requirements and interventions in China and the USA.
However, if this is clarified, Asian equities should quickly recover their losses.
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