Nomura cautious, but not overly pessimistic on Asia's equities in 2025

Nomura has adopted a cautious but not overly pessimistic stance on Asia's equities for 2025. The brokerage cites elevated geopolitical tensions, less supportive monetary policies, and China's restrained fiscal stimulus as reasons for caution.

 

For the MSCI Asia ex-Japan index, Nomura predicts muted returns, with end-2025 targets ranging from 573 to 859. The index is currently around 590 levels.

 

India is one of its top overweight positions in the Asia ex-Japan basket, despite near-term risks of valuation de-rating. Nomura remains structurally overweight on India, citing its strong structural growth prospects and above-average earnings growth potential.

 

The brokerage is also overweight on Malaysia, neutral on China, Indonesia, and Singapore, and underweight on Thailand, the Philippines, and South Korea.

 

“Balancing between economic/earnings/sectoral cycles, structural growth prospects, geopolitical risks, and equity market liquidity, we remain structurally overweight India. Although we see some more near-term risk of healthy valuation de-rating amid a slowing macro/earnings cycle, structural attraction remains intact and the market will still likely post above-average earnings growth, even assuming earnings misses,” Nomura said.