|
Much of the economic growth limelight has been on China and to a much lesser extent India. And we know the combo – Chindia - is adding high octane fuel to current global growth.
What about the rest of Asia? ‘The Tiger Economies’ is a pretty loose term that describes the rookie economies of Asia. The ‘eastern’ tigers are Singapore, Hong Kong, Taiwan and South Korea. These economies have combined strong growth, industrialisation and integration with the ‘western’ world in a manner that is reasonably well understood.
I recall when I was with BHP and involved in a feasibility study for a high carbon mill in Indonesia – some 20 years ago – the biggest issue was political stability. Likewise, the Philippines and Thailand offered some opportunities for investment, but again uncertainty about ‘coups’ dare I say, made investments in such countries high risk.
When you are looking at investments off shore – whether you are doing it directly or through shares or managed funds you want to have a sense that there will be an element of stability. Total peace of mind would of course minimise the risk and hence lower returns.
For the average share investor it is nigh on impossible to totally be in touch with these emerging Asian economies. However this is not a good enough reason to totally ignore the market. In fact, you forego both diversification and the prospect of better returns than one might achieve on the local market over the coming 12 months.
Prospective GDP forecasts for the tiger economies range 4-6%, for Pakistan are 6-7%, Malaysia about 6%. Very attractive compared to perhaps a sub 3% GDP locally.
Have a look at the performance of Managed Funds for the emerging markets and find a solid, long term performing manager and put your toe in the water!
Enjoy the ride
Tom Scollon
Chief Analyst
|