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Indian and Chinese stock markets could grow fourfold by 2050, Abrdn CEO says


One guard walks by the Mumbai National Stock Exchange, India’s building, February 9, 2018.

Danish Siddiqui | Reuters 

The Indian and Chinese stock exchange capitalizations could quadruple by 2050, as Asia transforms itself from “laggarde to leader” during the climate transition. According to Abrdn CEO Stephen Bird.

Bird celebrated the 30th anniversary of opening the first Asian office in Singapore by the British investment firm. CNBC saw the letter. Bird was elated at the transformation that had taken place over the past three decades, which has helped lift more than one billion people out of poverty.

He pointed out that the region has a larger share of the global economic than in 1997 during the Asia Financial Crisis.

Bird stated that capital markets are changing and have become a place where foreign investors can’t make it work.

He stated that the next thirty years “looks every bit as thrilling as the previous,” and recommended that investors stay calm in times of volatility while keeping their eyes on the longer-term.

Chinese stocks endured a rough year. President Xi Jinping’s “zero-Covid” strategy has stifled economic activityThis has caused supply chain disruptions that have spread to global markets.

Goldman SachsRecent analysts stated that they are “seeing light at the end of the tunnel,”Bird supported the view that Asian equities could transition from being “laggards” to “leaders,” both in terms of performance as well as their contribution in dealing with the climate crisis.

China and India will become the third and fourth largest economies globally in the next decade. Meanwhile, their customers will influence global taste and trends. Bird predicts that capitalization in their equity markets will increase four-fold or more by 2050.

Other countries in the region also offer exciting possibilities. While Bangladesh, Indonesia, Vietnam, and Vietnam offer some of the most promising growth rates worldwide, Japan’s and South Koreas older populations have accumulated significant savings which must be used to improve their performance. Singapore is the regional’s largest global financial hub, and will therefore be the center of everything.

Bird recognized that there is no way to go around the fact that Asia’s growth has been driven by globalization, and that climate change presents a serious threat.

Asia has been responsible for the largest increase in carbon dioxide emissions globally over the last three decades as a result of its growth. He said that the increased human footprint can also be seen in increasing air pollution and biodiversity losses.

Bird stated that Asia can’t solve the climate crisis by itself, but its largest economies need to work together in order to reduce dependence on fossil fuels for their economic growth. While most major economies of the region are now committed to net zero targets, Asia plays a key role in helping develop technological solutions to climate change.

Bird stated that decarbonization is dependent upon Asian innovation, whether it be in the form solar panels or batteries for electric cars, and green hydrogen.

Abrdn – which has around £464 billion ($586.35 billion) in assets under management as of most recent results – has observed that interest in sustainable investment among local investors is also on the rise, along with active engagement between asset managers and companies, creating potential opportunities for new forms of “sustainability-linked loans and bonds.”

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Bird – who took the reins of Abrdn in September 2020 after a 21-year career with Citigroup’s Asian and Latin American operations – urged Asian governments to strengthen the credibility of their net zero commitments, offering investors greater surety in allocating capital to the region.

China is an example to follow and set up carbon pricing. It would create certainty, encourage infrastructure investment and increase investments in low-carbon technologies. He suggested that revenue could be used to ensure that there is no carbon transition,” he stated.

We encourage greater climate-related instrument use, such as green bonds. This would align capital market participants’ interests while increasing issuance would encourage portfolio diversification.

Bird stated that Asia’s trade, political, and economic forums ought to be a chance for the continent to align climate and sustainability standards. He suggested that a common continent-wide framework would strengthen financial flows into Asia.

Asia’s century will be this century. Bird stated that it must be the century where economic goals are balanced with sustainable development goals. Bird concluded that the financial industry could and must be a key role in reconciling these two priorities. They can guide investments to support both ends.