Asian economies basking in a sweet spot of exports bounce

Who's leading the race?

According to Deutsche Bank Research, so far, 2014 has not been kind to EM in general and Asian markets in particular, but recent economic data has been reassuring, helping us to hold on to the central narrative of the year, which is that even as rates normalize, Asia will enjoy an export pick-up driven year of good growth.

Exports from China, Malaysia, Philippines, and Singapore have begun to accelerate, and once the Lunar New Year related distortions fade, we expect equally encouraging figures from Hong Kong, South Korea and Taiwan. Even India and Indonesia, which don’t share in the rest of the region’s ties to the global electronics cycle, are in positive exports growth territory.

Here's more from Deutsche Bank Research:

Exports from China (10.5%yoy), Malaysia (7.5%yoy), Philippines (15.8%yoy), and Singapore (5.6%yoy) have begun to accelerate, and once the Lunar New Year related distortions fade, we expect equally encouraging figures from Hong Kong, South Korea and Taiwan.

Even India and Indonesia, which don’t share in the rest of the region’s ties to the global electronics cycle, are in positive exports growth territory.

Asia’s exports recovery (particularly electronics exports) is still in early stages, in our view, given the recent upbeat figures on new orders in the US and eurozone PMI surveys.

Recent FX depreciation in a number of Asian economies would bolster their local currency earnings and help with competitiveness, making gains from the exports even greater.