Spending on long-needed infrastructure plans in the Southeast Asian countries of Thailand, Philippines, Indonesia, and Malaysia, could be a boon for their economies. Here’s what they have planned:
In the Philippines, President Rodrigo Duterte is promising 8 trillion pesos ($160 billion) of spending over his six-year term.
In Thailand, the military-led government plans to list an infrastructure fund on disallowed in March.
In Indonesia, the government has set aside almost 10 percent more to spend on projects this year.
In Malaysia, efforts are pushing ahead with infrastructure plans that include a high-speed rail line from Kuala Lumpur to Singapore.
Infrastructure spending is a massive business. And that could provide big benefits at a time when nations like these are ramping up modernization efforts to cope with the challenges of a growing population.
All told, this is good news for Asia, one my favorite markets on the planet.
All told, good news for Asia, one of my favorite markets on the planet.
But don’t forget: The need to build or revitalize things like transportation grids, telecommunications networks, power supplies and other critical facilities is a pressing concern not just for Asia and other emerging markets, but for advanced industrialized societies as well.
So, as Southeast Asian governments embark on their own programs to boost roads, rails, ports and power plants, will Trump’s global trade policies stifle their abilities to execute their own spending plans?
The fact is for one of his first acts as President, Trump signed an order withdrawing the U.S. from the Trans-Pacific Partnership accord with 11 other nations — making good on one of his protectionist campaign promises.
Will moves like these derail Asian infrastructure spending?
While it’s still too early to say for sure — there are simply too many unknowns — I don’t see it happening.
In fact, all year long, I have been telling my Real Wealth Report members that there is nothing to worry about when it comes to Southeast Asia. I believe that agreements will be reached with the U.S. that work for all.
The Asian growth story is alive and well. And Asian markets are now in the early stages of forming new bull markets. The high demand for the kind of infrastructure projects that I’m talking about here is going to make that growth story even sweeter.
So, adding equity exposure to these countries — especially in global infrastructure shares — could be a home run, when the timing is right.
They are not quite ready for prime time yet, but that time is near.
Best wishes,
Larry
AGO Price at posting:
4.7¢ Sentiment: Hold Disclosure: Held
