Asia Investors Chasing Trump Bets Zero In on Trade War Winners

By Abhishek Vishnoi and Georgina McKay (Bloomberg) –

Investors across Asia have ramped up bets on potential winners from Donald Trump’s imminent return to the White House, fueling big jumps in some popular stocks.

The Republican candidate’s election victory led to rallies in the shares of Korean shipbuilders, Indian electronics manufacturers, Australian steel suppliers and even Vietnamese industrial parks. The common thread: a belief that these companies can benefit from tougher restrictions on global trade, which will squeeze supply chains but create opportunities for nimble firms.

The share price jumps underscore how some investors in the region are taking a micro approach to investing ahead of Trump’s second term, a contrast to the sweeping macro plays that drove ‘Trump trades’ immediately after the election.

“Some emerging markets investors have started looking beyond the top down approach to the Trump trade with specific pockets of opportunity for alpha generation,” said Nirgunan Tiruchelvam, an analyst at Aletheia Capital in Singapore, adding that “sector-focused narratives have started forming.”

South Korean shipbuilder Hanwha Ocean Co.’s shares have surged 30% over the past two days, while its peers HD Hyundai Heavy Industries Co. and Samsung Heavy Industries Co. also jumped. The buying spree was helped by a phone call between Trump and South Korean President Yoon Suk Yeol, during which the president-elect expressed hopes for close cooperation with the Asian nation.

Hanwha Ocean is buying a former Navy shipyard in Philadelphia and recently secured Korea’s first ever contract to overhaul a US naval vessel, both factors that may reassure investors worried about the risk of Trump’s ‘America First’ approach.

Shares of Sydney-listed BlueScope Steel Ltd. rallied alongside US domestic steelmakers, jumping more than 5% two days a row. The company gets almost half of its revenue from North America, largely through its Ohio-based arm North Star headquartered in Delta, putting it on the right side of possible tariffs that may hurt the Australian economy. 

Indian electronics manufacturers Dixon Technologies India Ltd., Kaynes Technology India Ltd. and Syrma SGS Technology Ltd. closed more than 8.5% higher on Wednesday, as local investors reacted to the likelihood of a Trump win. Economists think India will get a boost from a growing ‘China Plus One’ strategy, where global companies try to diversify supply chains away from China without abandoning it entirely.

“Tariff and fiscal risks are back on the table,” said Charu Chanana, chief investment strategist at Saxo Markets. “This could work to the advantage of China Plus One beneficiaries, particularly India, with its significant structural strengths in demographics and infrastructure spending.”

Companies adopting the ‘China Plus One’ strategy will also invest more in Southeast Asia, Maybank Kim Eng Securities analyst Chak Reungsinpinya wrote in a note dated Nov. 6. 

The bets on these stocks were not all one-way. Some of the big gainers fell on Friday, and investors are still wary of the uncertainty that will greet them when Trump returns to the White House. 

But the moves point to a sense among investors in Asia that, despite the gloom about the impact of trade tensions between the world’s two biggest economies, there are profits on the table for active stock pickers.

“Across Asia, industries from defense to electronics are benefiting from the US pivot away from China,” said Billy Leung, an investment strategist at Global X ETFs. “To me this isn’t just trade redirection — its like a sectoral reshuffle.” 

© 2024 Bloomberg L.P.

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