U.S. Markets closed

What Does India Economic Turnaround Mean for Investors? a Wall Street Transcript Interview with Khiem Do, Head of Asian Multi-Asset for Baring Asset Management in Hong Kong

67 WALL STREET, New York - January 22, 2013 - The Wall Street Transcript has just published its Investing in Asia and Other Strategies Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Investing in Asia - Growth at a Reasonable Price - Longer-Term Investing - Asia Pacific Investment Theses

Companies include: Samsung Electronics Co. Ltd. (005930.KS), Hyundai Motor Company (005380.KS), LG Electronics Inc. (066570.KS), Industrial and Commercial Bank of China Limited (1398.HK) and many others.

In the following excerpt from the Investing in Asia and Other Strategies Report, a highly experienced portfolio manager discusses the outlook for the Asian Markets for investors:

TWST: In which Asian countries do you currently see the best investment opportunities and what do you like about them?

Mr. Do: Over the past six months we've been adding to China because we noticed the pessimism relating to China growth and the Chinese banking system was unwarranted. We're not saying that China doesn't have issues, but we thought those issues were overly played or overly discounted. And as a result, the valuation of Chinese stocks became extremely cheap, and at the same time, starting from September of last year, we noticed that the Chinese economy has started to bottom out and turned around. As a result, with growth being revised up, combined with very cheap valuations, we thought that was a great opportunity for us to add to that unrecognized growth story in China from a country viewpoint.

Outside of this market, we also maintained a fairly high exposure to smaller Asian markets, including the Philippines, Thailand and Indonesia. As far as Korea is concerned, it is also a cheap market. We've been investing in Korea for a very long time, and for those who have been investing in Korea for a long time as we did, they would be fully aware of the fact that the Korean market is always cheap. Nonetheless, if we look at the price-to-book relative to the ROE of many companies in Korea, it is quite undervalued.

So we do like the Korean market long term because it does offer international brands - Samsung, Hyundai (005380.KS) and LG (066570.KS) - at a cheap valuation. That said, we have not been adding a lot more to Korea over the past two months because the Japanese yen has started to weaken substantially against the U.S. Dollar and the Korean Won. So when that happens, obviously, investors would be selling their Korean export exposure, especially the autos, and buy the Japanese equivalent.

So the severe weakness of the yen has put a stop on our endeavor to look to add to positions in Korea at the moment. We have also added back to India as well. We were underweight in that market about six months ago, but our Indian specialists argued that a lot bad news surrounding the inflation and current account deficit issues were well priced in the market. So we took advantage of cheap growth opportunities in India, and thus have been adding there too.

TWST: Can you give us a few examples of your holdings that you believe are representative of your investment approach?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.