Market Chat - 2Q23 Strategy - The WOW Factor Coming From China And OPEC

Following the banking crisis in the US and Europe, we believe the sentiment will turn better in 2Q23, underpinned by (i) reopening of China’s borders, (ii) higher crude oil prices, (iii) strong growth in tourists’ arrival and (iv) well supported demand in the technology sector due to rising adoption of AI applications. However, we understand there are several concerns if (i) the Fed remains hawkish and the economy enters a recession and (ii) the BTFP has ended. Under this setup, we favour a few sectors, namely the (i) O&G, (ii) Technology, (iii) Medical, (iv) Utilities, (v) Telco and (vi) Shipping, and (vii) Poultry.