Significant growth in the number and wealth of middle-class consumers, combined with an expected acceleration in infrastructure spending, helps builds a compelling, multi-year case for investing in ASEAN equity markets.
This is a view shared by Soo-Hai Lim, Investment Director for Asia Pacific equities at Baring Asset Management and manager of the Barings ASEAN Frontiers Fund, a mutual fund.
He says: “Sustained and superior economic growth is being driven by domestic demand from a growing number of consumers. ASEAN economies have successfully restructured and deleveraged since the 1997 Asian financial crisis and are firmly on the investor radar including, significantly, Foreign Direct Investors who are allocating resources and capital. This in turn is creating jobs, resulting in a re-rating of property prices in both industrial and residential sectors.”
“While Indonesia continues to be the ‘poster child’ for ASEAN economies, and has overtaken its pre-Asian-crisis market highs in USD terms, the Philippines has also performed very strongly thanks to growing domestic confidence, and much improved macroeconomic fundamentals – the Philippines is the best performing ASEAN market and the Philippine peso is the best performing Asian currency to date. Thailand is also looking buoyant, with the second highest return on equity in the region.”