E-commerce, food delivery and online payments are among digital services expected to grow sharply in Southeast Asia in the coming years — and JPMorgan has named its top stock picks to gain a foothold in the booming market. Analysts at the Wall Street giant estimated that between the financial years of 2020 and 2025, the total value of goods sold in the e-commerce and food delivery segments in Southeast Asia could rise around 30% each year. Meanwhile, third-party online payments in the region could expand at faster rates — helping to lift growth in online lending and the distribution of financial products, the bank said in a Dec. 3 report. Technology stock picks Within Southeast Asia's internet sector, New York-listed Sea Limited is JPMorgan's "core pick." The bank said the Singapore-headquartered company is set for further growth in its e-commerce, fintech and gaming businesses. The bank also likes two stocks in Indonesia: E-commerce company Bukalapak as well as technology and media conglomerate Elang Mahkota Teknologi . The latter has a stake in Bukalapak and a partnership with ride-hailing giant Grab , which debuted on Nasdaq last week . Indonesia has Southeast Asia's largest digital economy, which is expected to hit $200 billion in size around 2025 — more than quadrupling from $44 billion in 2020, said the bank. 'Tech-leading banks' In addition to internet stocks, JPMorgan likes banks that have become leaders in the digital space. Those "tech-leading banks" have an edge against their peers and competitors from the financial technology sector, the bank said. These are the Southeast Asian banks that JPMorgan recommended: Siam Commercial Bank : Thailand's banking sector would be one of the largest beneficiaries from a resumption in economic activity, and Siam Commercial Bank stands out for its fintech strength, said the Wall Street giant. Bank Rakyat Indonesia : Profitability among large Indonesian banks is expected to rebound in 2022 as more economic activity resumes, JPMorgan said in naming Bank Rakyat Indonesia as its preferred pick. Bank Jago: The Indonesian bank could post surprises in the number of users and lending margins in the next three to nine months, said JPMorgan. "Quite volatile" stock movements also offer trading opportunities, the Wall Street bank said. Techcombank: The company is JPMorgan's top pick among Vietnamese banks. Techcombank's gains in earnings per share and market share are supported by its technology capabilities and capital strength, said JPMorgan. DBS Group Holdings : Within Asia, Singapore banks would most benefit from higher interest rates while DBS' tech capabilities and asset quality strength warrant a place in investment portfolios, said JPMorgan.
