Nordea Asset Snaps Up Asian Financial Stocks During Global Rout

Ishika Mookerjee, Bloomberg News

(Bloomberg) -- Nordea Asset Management AB saw an opportunity in this month’s rout and bought Asian financials, as it remains bullish on the sector’s earnings growth prospects.

“We have added to our insurance holdings in Asia,” Hilde Jenssen, Nordea’s head of fundamental equities, said in an interview in Singapore on Monday. “It’s clear when half a trillion is wiped off in market cap value globally in financials in about a week, it’s hard to not find something that’s interesting,” she said.

The fund is maintaining its positions in banks in India and Southeast Asia, “and will be monitoring closely and add opportunistically,” she added.

The rapid collapse of some banks in the US and troubles at Credit Suisse Group AG have sparked fears about the health of the global financial system, roiling markets this month. While Morgan Stanley sees margins in emerging Asia coming under pressure, others say it’s a chance to load up on bank stocks, with some economies projected to grow at 5% or more this year.

Compared to “extreme examples” in the US, Asian banks generally have lower duration risk and the non-performing loan ratios of Indian and Southeast Asian lenders have improved, Jenssen said. Meanwhile, there’s ample room for insurers to grow given the low penetration rate in Asia compared to the West, she said.

Nordea’s equity funds investing in the region have positions in India’s ICICI Bank Ltd. and HDFC Bank Ltd. as well as Bank Rakyat Indonesia Persero Tbk, according to latest data compiled by Bloomberg. Jenssen said the $256 billion asset manager is also investing in highly regulated European banks that are well capitalized.

Depending on the outcome of the Federal Reserve policy meeting on Wednesday, the Copenhagen-based executive said her team may use an ensuing selloff to review its positions in Asian financial shares.

The Bloomberg Asia Pacific Banks Index is down 2.4% since March 8, when Silicon Valley Bank’s troubles began to roil markets, although it outperformed the 8.9% drop in its world peer.

“When you see these fluctuations around fair value, that for us is super interesting. It’s about keeping your powder dry and jumping in,” Jenssen said.