CIO Insights Resilience versus recession Investors in Asia must differentiate between the individual capital markets in terms of share valuations and expected profits. Stock exchanges in China, Taiwan and South Korea saw significant capital outflows and drops of up to 30% in share value in 2022 amid the global uncertainty and investor concentration on “safe havens” for investment. These markets in particular are hoping for a comeback given the improved macroeconomic environment, with South Korea experiencing substantial net capital inflows in November. The Indian stock market has performed well in recent months, with strong growth in corporate profits expected in 2023. Japan, the sole traditional industrial nation in the region, might represent something exceptional for investors: with a cyclical economic structure that could benefit particularly strongly from recovery in China. The upcoming year is the Chinese Year of the Rabbit, which symbolises confidence and strong- mindedness – like the region itself. Many Asian markets that were hard hit in 2022 are hoping for a comeback with an improved macroeconomic environment and, by extension, improved investor sentiment in the upcoming Year of the Rabbit. Asia: hope in the Year of the Rabbit Market and portfolio implications: o Reopening and dynamic economic development are shifting investors’ focus back to Asia o Diverse range of investment options depending on valuations and expected profits o India as the new China; Japan’s market structure may appeal. In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Performance refers to a nominal value based on price gains/losses and does not take into account inflation. Inflation will have a negative impact on the purchasing power of this nominal monetary value. Depending on the current level of inflation, this may lead to a real loss in value, even if the nominal performance of the investment is positive. Investments come with risk. The value of an investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk. This document was produced in December 2022. 24