Asia remains an attractive place to invest in despite its volatility, according to Ezra Sun, fund ma...
Asia remains an attractive place to invest in despite its volatility, according to Ezra Sun, fund manager of Newton's Oriental Fund. He believes restructuring and outsourcing mean that Asian markets are in an excellent position to benefit from the hard time that companies around the rest of the world are facing.
Consolidation in the Asian markets has meant that companies there are in a better position than ever before to offer shareholder value, according to Sun.
At the same time a profit margin squeeze in the US and Europe has led to an increase in outsourcing to Asia where overheads are less expensive.
Korean and Chinese companies have been under pressure to restructure, which has allowed them to make acquisitions to power growth.
China is keen to join the WTO and it has made a concerted effort to encourage consolidation to avoid multinationals expanding too far into Chinese markets at the expense of local companies.
Chinese companies are given the opportunity to buy assets from the state at reasonable prices, according to Sun. Sun cited the example of Huaneng Power International in China, which has taken on plants in areas with strong economies and with a high demand for power.
In Korea, corporate restructuring and the breakdown of chaebols has fostered a more considered attitude to corporate governance and a focus on profitability, said Sun.
He added that the conglomerates had been broken down into smaller units that were able to focus more effectively on core competencies. This has led to a favourable re-rating of stocks, he said.
Less environment, more governance threatens to undermine firms' green credentials
Evidence your compliance
Quarter of single pensioners dependent on state