Dynamic Regional Growth
The Global X Southeast Asia ETF (ASEA) is comprised of 40 of the largest and most liquid equities from the five original ASEAN member countries - Singapore, Malaysia, Indonesia, Thailand and the Philippines. Southeast Asia represents 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 inter-regional trade, domestic consumption, M&A, and improved economic coordination.
Regional Integration, Trading Hub
Growth Opportunities - From 2003-2013, the five ASEAN economies experienced an average annualized growth rate of 5.3%. Analysts predict growth will continue at an average annual rate in excess of 5.0% between 2014 and 2018. Economists have identified domestic private consumption and infrastructure investment as the most significant drivers of growth in the region (Source: World Bank 2014, OECD Southeast Asian Economic Outlook 2014).
M&A Activity - M&A deals totaling $64.9 billion occurred in the ASEAN countries during 2013. The financial services sector accounted for the greatest market share, representing 26.9% of the total M&A value, followed by the energy, mining, and utilities sector, contributing 20.7% (Source: MergerMarket Southeast Asia 2013).
Regional Integration, Trading Hub
Investment Inflow - ASEAN economies achieved FDI inflows of $128.4 billion in 2013, overtaking that of China, where FDI added up to $117.6 billion. The FDI inflows to ASEAN economies are expected to increase over the next few years, given favorable demographics and competitive wages (Source: Bloomberg 2014).
Growing Middle Class - The middle class is forecasted to become 62% of the population by 2030. A sizable middle class, coupled with growing incomes, is expected to be a key force in driving greater domestic consumption (Source: Mddionline 2014, JP Morgan Investment Insight 2013).
Export Strength - Exports by the five ASEAN countries grew at an average annualized rate of 5.9% from 2003 to 2013. The IMF estimates their exports to grow in excess of 6.0% per annum between 2013 and 2018 (Source: World Bank 2014, IMF 2014).
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