Dynamic Regional Growth
The original ASEAN member countries - Singapore, Malaysia, Indonesia, Thailand, and the Philippines - represent a key region that is poised for economic growth and integration. In addition to opening up trade with major partners such as China, the European Union, and South Korea, the ASEAN members continue to grow through greater inter-regional trade, domestic consumption, M&A, and economic coordination. The Global X FTSE ASEAN 40 ETF (ASEA) seeks to capture the future growth in the region by providing access to 40 of the largest and most liquid companies among the five original ASEAN members.
Regional Integration, Trading Hub
Growth Opportunities - From 2005-2012, the five ASEAN economies experienced a 4.9% annualized growth rate. Analysts predict growth will accelerate to an average annual rate of 5.5% between 2013 and 2017. Economists have identified domestic private consumption and investment as the most significant drivers of growth in the region. (Source: IMF, OECD Southeast Asian Economic Outlook 2013).
M&A Activity - M&A deals totaling $89.4 billion occurred in the ASEAN countries during 2012, an 89% jump from 2011. The consumer sector was particularly active, representing 47.6% of the total M&A value, followed by the financial services sector contributing 16.6%. Financials are expected to see substantial activity in 2013 as well, with $20 billion of deals already in the pipeline. (MergerMarket Southeast Asia, 2012).
Regional Integration, Trading Hub
Investment Inflow - Combined, the ASEAN economies attracted the third most Foreign Direct Investment inflows in the world, trailing only the US and China. Aggregate FDI inflows to the ASEAN economies in 2012 represented 7.1% of GDP. (Source: UNCTAD)
Growing Middle Class - ASEAN countries account for 14% of the Asian middle class, even larger than India's 11% share. Income growth across the large population is expected to play a vital role in driving greater domestic consumption. (Source: JP Morgan Investment Insight)
Export Strength - Exports by the five ASEAN countries grew at an annualized rate of 5.4% from 2008 to 2012. The IMF estimates exports to grow at annualized rate of 7.9% through 2018. (Source: Roland Berger, International Trade Centre)
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