| Asian equities to invest in |
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| Written by Editor | |
| Thursday, 17 December 2009 14:34 | |
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"Stock picking will be the key to Asian stock success in 2010." Wilfred Sit, Regional Chief Investment Officer for Asia Pacific, Mirae Asset, believes that high quality stocks showing sustainable growth, combined with a focus on Asia’s huge domestic markets including those driven by consumer demand, will be the key Asian investment themes for 2010. Sit explains: "In 2009, low quality stocks outperformed on the rebound but they are very unlikely to sustain this over the next 12 months. As Asian markets are no longer undervalued, we expect that earnings growth will drive performance and for this reason, high quality stocks should fare much better instead. Stock picking will be the key to success in 2010. "Sectors that are driven by domestic demand will be another major theme and we’re particularly focused on financials, property, consumers and infrastructure. Regarding sectors more dependent on external demand, we’re only focusing on globally competitive stocks that are able to gain market share and grow their business amid a global environment of low growth. Examples would include Korean auto and Taiwan technology. On a country basis Wilfred believes that China, India and Indonesia lead the pack due to their huge domestic markets. “Indonesia is starting from a lower base but has an improved political climate, decent domestic demand,, abundant natural resources, while inflation has become more stabilised than before. This is a country we intend to remain overweight in next year, particularly in banks due to a high growth in credit,” he added. “We also believe that Taiwan, which is currently below the radar of many European investors, will be a key investment theme over the next couple of years, added Wilfred. “Taiwan is becoming much closer to China both financially and economically and is benefiting from the latter’s growth. Taiwan would also benefit from the upcoming recovery in corporate I.T. spending and PC upgrade cycle. Investors would do well to get in early.” “As central banks continue to diversify away from the weak US dollar, Asian equities have emerged as a key beneficiary together with property and gold. Were there to be a major US dollar rally (and hence a correction in Asian equities) we believe this would present an attractive long-term buying opportunity for investors currently on the sidelines who are keen to diversify out of the USD.” 
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| Last Updated ( Thursday, 17 December 2009 14:37 ) |