According to investment management firm BlackRock, the telecommunications stocks across Asia can be the next promising area for financiers in 2020. Shifting the spotlight on the segment in its outlook report for the next year, Andrew Swan, Chief of Global Emerging Markets Equities at BlackRock, said, “We have purchased telecom stocks we had not approached in years. A distinctive BlackRock Asian equity range exposure to telecommunication is now in the high single digits.” That is based on firms that BlackRock has recognized in India, China, and Singapore, according to Swan.
The asset manager stated that telecommunication stocks will prove strong and expects the group to meet “reasonably best” earnings anticipations. Swan reported that BlackRock views “higher market returns” for such stocks. In an email to CNBC, he wrote, “We see persisting macro weakness and with that proceeds risk in the larger market. In this background, telecommunication stocks provide resilience to earnings particularly where they have the potential to ward off pricing competition or profit from expansion initiatives in 5G.” Many operators are mostly to target on cost-cutting in the next year, through measures like asset sales and network-sharing, as per to an EIU (Economist Intelligent Unit) report.
Speaking of telecommunication stocks, recently those stocks received positive signals from the key market players in India. The shares of Indian telecommunication firms have been gaining following they declared plans to surge the cost of subscriptions to their consumers. Vodafone Idea climbed by 14%, Bharti Airtel advanced by 3.67%, and Reliance Industries—which dominates the unlisted telecommunication unit with its Jio—rose by 2.28%. In the last 1 Month, Vodafone Idea jumped by 81.16%, Bharti Airtel 22.6%, and Reliance Industries by 8.9%. These companies have hiked tariffs on their popular prepaid plans by almost 25–41%. The tariff hikes declared by telecom companies are “significantly higher” than anticipations and are helpful for companies’ share prices. The industry was anticipating a hike of 10–12%.