Asia offers best investment opportunities in next decade
10 Oct 2012
Some of the best investment opportunities globally will be found in Asian markets over the next 10 years, according to Eastspring Investments. Ashish Goyal, CIO, Asia and Global Emerging Market Equities at Eastspring says Asia will grow 3% faster on average than the rest of the world each year for the next 10 years: "Asian growth will be driven by longer term structural factors, urbanisation and industrialisation. Strong domestic savings will provide the bulk of the funding, making it sustainable."
Asian capital markets are rapidly deepening and widening and the region's corporate sector has increasingly acquired scale, balance-sheet strength and global competitiveness, Goyal said. Corporate Asia is increasingly professionally managed, return on capital has improved, accounting and corporate governance standards continue to converge with global best practice. It is a lot less "emerging" and hence a lot less risky than commonly perceived. "Asia is underrepresented in most global portfolios on a market index and GDP basis. Allocations to Asia will continue to increase."
Navigating Asian markets requires expertise and local knowledge. There are rich investment rewards to be reaped by research driven, fundamental investing in Asia, Goyal added. "Asia faces many cyclical challenges today but fortunately the positive drivers of growth are structural, rooted in demographics, industrialisation and urbanisation.
"A strong focus on education will help move up the value chain as the corporate sector invests more in R&D and focuses increasingly on productivity gains."
Author: Penny Leung