Results 351–400 of 490 found.
Remembering Hainan Development Bank
With tropical weather and white sand beaches, Hainan Island is often referred to as the Hawaii of China. Popular particularly among Chinese honeymooners, Hainan attracts tourists from around the world. Few, however, recall the islands darker days when it was mired in the failure of Hainan Development Bank (HDB). In June 1998, Chinas then regulator of commercial banks announced the closure of HDB, which was saddled with bad debts.
More Fun in the Philippines
A combination of beautiful beaches, year-round sunshine, interesting historical sites and a hospitable population is generally fairly effective in forming the seeds required to capture a part of the worlds largest service sectortourism. Many Southeast Asian countries have spent the last 20 years trying to take advantage of their natural and cultural attractions to participate in the US$6.3 trillion global tourism market, with numerous success stories.
Civil Disobedience Hong Kong Style
Walking around Hong Kong a couple of weeks ago, I was struck by the citys own version of the Occupy Wall Street movement. Directly underneath the HSBC tower, in the center of Hong Kongs vibrant financial district, is a small paved area, a portion of which is home to Hong Kongs anti-capitalist, anti-Wall Street movement. In the skyscraper above, thousands of banking and financial employees toil away daily, not overly disturbed by the protesters directly beneath their feet. Why? Because the civil disobedience below is just sowell, civil.
India's Demographic Dividends
Fortunately, Indias vast population of 1.21 billion, considered a time bomb not long ago, is increasingly being viewed as a positive. While its population has grown by roughly 18% over the past decade, the percentage of its children has actually fallen during this same period.looking to base manufacturing operations in other countries.India would do well to realize that this period of demographic shift is not merely a stroke of luck, but a window of opportunity. For growth to be sustainable requires some reforms in the way people live and work.
Postcard from Southeast Asia
A recent research trip I took to Thailand and Indonesia was a welcome break from watching gloomy macroeconomic data flash across my office computer terminals. Being on the ground, and literally on the streets, in Bangkok, Jakarta and several smaller Indonesian towns offered a reality check on the economic potential of Southeast Asian countries. This is not to say that these countries dont face challenges at their respective stages of economic developments. But speaking face to face with management teams offered me a fuller perspective.
Postcard from Shenyang, China
When people think about China, they typically think about cities like Beijing or Shanghai. But there are a number of lesser-known cities with populations as big as (or bigger than) New York. My hometown of Shenyang is one of these cities. Largely left behind during the countrys economic reforms of the 1980s and early 1990s, Shenyang has more recently started to attract some attention for the comeback it has made.
Mongolia's Treasure Chest
There has been much hype recently over the treasure chest of natural resources in Mongolia. Dubbed the next Saudi Arabia of coal, Mongolia claims more coal than China, which produced nearly 4 billion tons last year. At the same time, however, there continue to be conflicting reports from the Mongolian government over who may be allowed to develop and ultimately own the rights to the country's precious resources. One key concern among global investors is natural resource nationalism, a term used to describe the tendency of governments to assert control over these resources.
All in the Family
A recent study revealed that family-run businesses are at the heart of Asia, representing half of all listed companies with a market capitalization equal to one-third of Asia's GDP. Naturally, these businesses are a critical source of private wealth creation for the region. In researching Asia's small companies, we note that the role of ownership is important, especially when owners have significant financial interests in a firm, allowing them to take a long-term perspective in running their businesses.
Shareholder Letter and Commentaries
How the markets behave in the near future, including the size and duration of any pullback, is unknowable. However, we remain confident in the long-term growth and prosperity of Asia. Therefore, our approach, in the midst of what are admittedly absorbing macro discussions, has been to focus on finding good businesses, rather than try to speculate on events. As much as we all like to discuss the big issues of the day, the real excitement and challenge comes in discovering businesses whose future prospects are underappreciated by the average view of the investment community.
Powerless in India
More than 400 million people have no reliable access to electricity in India, which has more citizens living without power than any other nation. As is the norm in the worlds largest democracy, the root of the problem spans several sectors, and highlights structural issues and political considerations. It is an issue that ultimately requires clarity on policy and capable leadership at the helm of state-run enterprises.
China's Financial Reform
Investors have had concerns about Chinese banks with respect to slower loan growth and the potential for bad debt connected with local government financing vehicles. While 2011 was a difficult year for Chinas economy, its banks actually posted solid earnings growthso good, in fact, that last month, Chinese Premier Wen Jiabao declared that the countrys largest state-owned banks make money too easily. He added that their control on lending is limiting the growth of independent businesses. To remedy this, the central government agreed to allow private capital to enter the lending market.
Postcard from Taiwan
Managers of most businesses seem eager to duplicate their efforts in China and elsewhere in the region. Given the successful track record of Taiwanese companies in the food and beverage market, they should be well-positioned to transfer such service industries to China. I look forward to assessing the changes on my next visit, and hopefully, by then, getting into Taiwan will be a smoother process for me.
China's Family Planning
Family planning in China has become a complex topic of debate as the country feels increasing pressure due to its growing elderly population. Chinas current one-child policy, introduced in 1979, allows some exemptions, including those for ethnic minorities, rural farming families and parents who themselves are single children. But the social and economic costs of implementing the one-child policy have risen, and many are calling for change.
Eye on Myanmar
Since the U.S. declared that the Asia-Pacific region is America's new priority, its strategic moves in Southeast Asia have included the notable visit to Myanmar in December by U.S. Secretary of State Hillary Clinton. The visit was generally viewed as an endorsement of the reform processes that Myanmar has slowly begun to roll out over the past year or so. On my recent trip there, I was able to take a first-hand look at some of these developments.
Why Invest in Asia Bonds?
The development of Asias bond markets is one of the regions most profound economic changes of the last decade. This month Teresa Kong, CFA, writes about the diversification Asias bond markets can offer investors, and their three primary return drivers: credit, currency and interest rates.
The Healing Powers of a Weaker Yen
In mid-February, the Bank of Japan surprised markets with an expansion of its Asset Purchase Program, Japans version of quantitative easing. At the same time, the BOJ reworded its stance regarding inflation, revising its quantitative easing understanding to a goal and formally adopting an inflation target of 1%. Equity markets reacted positively, prompting foreign investors to pour more than US$5 billion into Japanese stocks and futures over just a 2-week period. The yen weakened to levels not seen since May 2011, and the currency seems to have broken from its 5-year appreciation trend.
Europe is undergoing its own version of austerity, where (ironically) the region actually is running budget deficits of 4.3% of GDP on average, spending more than it raises in taxes. These deficits run as high as 8.2% in Spain and 8.4% in the U.K. Meanwhile, as the U.S. calls for more stimuluseven with its own budget deficit at 8.7% of GDPit is interesting to look back at Korea and the crisis that began there 15 years ago this July.
Seeking Rewards in China
The muted performance of Chinas equity markets in 2011 has left many investors a bit wary. Since last year, concerns over Chinas slowing macroeconomic environment coupled with some corporate governance scandals left many investors on the fence about investing in China. And, even considering a robust underlying business landscape, many Chinese businesses are finding the tight credit environment challenging. With all these factors in mind, market analysts have turned more cautious on the growth outlook for Chinese firms and the market has subsequently seen a number of earnings downgrades.
Digital Content in Asia
Most companies I met with were still cautious over the years outlook, which was evidenced by unusually low inventory levels going into the Chinese New Year holiday shopping season. Smartphone sales, however, continue to be one bright spot for markets in Asia. While second-generation mobile handsets still dominate the regions markets, 3G phones and smartphone sales have been taking off in some economiesmost notably in Asias more developed countries, with Singapore showing the highest smartphone penetration rate in the world (at over 50%), followed by Hong Kong.
A Stock for its Dividends - Revisited
Since investors often turn to Asia looking for growth, they may overlook that the region offers a well-diversified universe of dividend-paying companies in terms of sectors and countries. This month Jesper Madsen revisits the notion that the Asia Pacific region should play an essential role for investors seeking yield and growth in income.
Bikes to Beemers and Bimmers
A shift to redividing the pie in favor of the masses could further fuel Chinas domestic consumption and contribute to its rising middle class. Changes that enable Chinas bicycle owners to trade up, swapping their bikes for motorbikes and then motorbikes for luxury cars would likely help temper unrest and foster greater growth in Chinas economy.
Sri Lanka's Story
Ever since Sri Lanka ended more than 25 years of civil war in early 2009, its economy has been on the upswing. The countrys stock market has quadrupled in the two years since the end of its long and bitter conflict, helped by strong, pent-up domestic demand. Among Sri Lankas top priorities has been a rebuilding of its tourism industry, and officials have set a target of attracting 2.5 million visitors by 2016. They may well get there if they keep pace with their 2011 annual growth rate, which saw a 30% increase to 856,000 visitors.
Eager to Move Home
Going public has long been viewed as a great milestone for entrepreneurs as the status of a public listing offers firms not only better access to capital, but also creditability. However, an increasing number of Chinese companies listed on U.S. exchanges have recently given up this privilege and been taken private again. Whether these firms are delisting from U.S. exchanges via their own management teams, strategic buyers or private equity investors, the value of these firms reportedly surpassed the total capital raised by Chinese firms in the U.S. from initial public offerings in 2011.
Willful Optimism in the Face of Pessimism
The U.S. has an unemployment problem, Europe is insolvent and Chinas banking system and property developers face the prospect of rising bad loans. The only thing that appears to be sustainable in investors minds is depression. Indeed, this has led to ongoing pessimismand perhaps too much of it. This month Robert Horrocks, PhD, takes a dissenting view on all the negativism as central banks in Europe, the U.S. and Asia appear to be shifting to more accommodative stances as inflationary pressures subside.
The Debate Over "One China"
Taiwans recent presidential race, which saw the re-election of President Ma Ying-jeou, generated much mutual interest both in Taiwan and in mainland China, where millions reportedly used social media networks to comment on the developments. The Kuomingtang (KMT) partys control for another four years brings up the topic of One China that so often dominates headlines and online chatter.
Chinese Debt Restructuring at Work?
How long a restructuring takes will also have a notable bearing on recovery value. Given the myriad of jurisdictions involved, the legal battles will likely take many months if not years to resolve. Given the time value of money, a penny recovered today is worth more than a penny recovered tomorrow. Hence, investors must weigh the cost in terms of time and legal costs against any future recoveries. Asia offers great opportunities, but one has to be mindful that some of the regions markets are still developing.
ChindopiaA Utopia of Sorts
China, India and Indonesia have a lot in common. They represent three of the four biggest countries in the world by population and have fast-growing economies. All three were relatively unscathed by the global financial crisis and resumed rapid economic growth soon after. But they are also diametrically different in numerous ways. China has a demand deficit and India and Indonesia have supply shortfalls. China, with its low cost of capital and surplus savings, has the exact opposite problem of India and Indonesia, with their high cost of capital and a capital import dependency.
Twenty Years of Investing in Asia
This month Asia Insight speaks with Paul Matthews and Mark Headley to get their thoughts on 20 years of investing in Asia. Why were you so convinced of Asias growth prospects at a time when few others were? Paul: As a young businessman trying to build an asset management firm focused on Asia ex Japan, the challenge for me was that Japan was 95% of the investment universe and also a majority of the market for asset gathering. While based in Hong Kong, I was given the task of looking for ways to build the business and so I was attracted to the markets that were open and growing.
The Riches of Three Generations
We have had the Great Leader and the Dear Leader. Now North Korea falls to the Great Successor. There is a Chinese proverb that says a family cannot stay wealthy for 3 generations. The wealth is made by the first, enjoyed by the second and squandered by the third. Will the same be true of power in North Korea following the death of Kim Jong Il? For the short term, the worries over leadership transition are likely to dominatethere is the potential for the new leader to want to demonstrate power, authority and dominance.The market reaction has already started to factor in this scenario.
A Bad Year for Common Sense
The phrase common sense can be a paradoxical concept in investment conversations. Seemingly imbued with a perverse, reverse meritocracy, the catchphrase appeals to investors as an intellectual leveler. It suggests, Let us think things through logically. Not only does this sound good, but what could be more egalitarian and humble? But when investment managers consider something to be common sense, be wary. We take a look at how common sense failed bond investors this year.
Another Growth Engine
South Korea has long been an export-oriented economy; more than half its economy is still dependent on export-heavy industries such as shipbuilding, automotives and information technology. The governments supportive political sentiment toward exports is understandable since these industries have been South Koreas bread and butter ever since it began its transformation in the 1960s from one of Asias poorest countries. But Korea now needs to take a deeper look domestically, particularly in terms of its social welfare system.
Indian Logistics Chug Along
In February, Indian officials addressed infrastructure issues with proposed policy reforms to create infrastructure debt funds, boost development with tax-free bonds and increase investment levels for foreign institutions. While these measures are steps in the right direction, the question remains over whether they will actually go the distance.
Coping with Uncertainty
During my recent trip to Beijing, I found the city to be bustling as usual with people and energy, and on the surface, the economy seemed just as robust as it did during my last several visits. But this time I did sense a slight erosion of confidence under all the visible activity. Among executives at small- and medium-size companies I detected uncertainty caused by the slow progress in global economic recovery and the need for change to cope with it.
Capital Flows: Asias Quiet Revolution
As markets evolve, so do regulations. The reflexive rebuke of capital controls once voiced by Western regulators has given way to a more flexible approach in times of extreme volatility. Asias regulators have observed the efficacy of volatility-dampening measures, and thus far, appear to have avoided the worst excesses. As fears continue over diminishing U.S. dollar power, Asias bonds remain attractive diversifiers for their yields and good credit ratings. However, one should never forget the volatile history of currencies in Asia.
Given the difficulties facing the European Union, there tend to be very few die-hard proponents of economic integration, or more specifically, monetary integration. This makes the pledge by the Association of Southeast Asian Nations to move ahead with forming an ASEAN Economic Community (AEC) a surprising phenomenon. The establishment and prioritization of a move toward a common market by 2015 with free movement of resources comes in response to increased competition posed by China and India.
Autumn has traditionally been a strong season for housing sales in China, and September and October are usually dubbed the golden and silver months. But press reports this year have called September copper and October iron in light of sagging sales figures. Sales dropped 49% over last year in the 14 major cities it tracks. Transaction volume in many major cities retreated even further. Due to weak sales and tighter loan quotas from banks, many developers have lowered prices in attempts to expedite sales. In Shanghai, prices for some units have declined 20% to 40%.
ASEANHow Different is it This Time?
ASEAN nations have recently seen increases in foreign ownership, and many show attractive demographics and the potential for strong economic growth. But with ASEAN nations having been a root cause and major casualty of crises past, investors may be asking: How sustainable is this? This month Kenneth Lowe, CFA, takes a look at how ASEAN got where it is today, and what challenges may still lie ahead.
Postcard from China
While companies throughout China are dealing with the pressure of rising inflation and tightening macroeconomic policies, many are cautiously optimistic about continued (albeit moderated) growth. In addition, more and more are seeing a domestic focus on that growth, and the development and maturity of the local restaurant industry is one example. Chinas food services industry is estimated at US$350 billion and growing. Although the industry is still highly fragmented, more restaurant chains are being launched to deliver consistent, high quality and safe foods.
Postcard from Taiwan
On the surface of things, Taiwan indeed seems dwarfed by the glamour of some of its Asian counterparts. However, encouraging changes have been taking place since President Ma Yung-Jeou took office in 2008. These have included more relaxed restrictions on investments into China by Taiwanese companies, direct flights from China and, more recently, approved travel among individuals from China. In 2010, 1.6 million mainland Chinese tourists visited Taiwan, compared to just 81,000 in 2007. In related travel improvements, I was also encouraged to see ongoing renovations to the airport terminal.
Postcard from Japan: Beyond Energy Savings
Conservation measures helped lower peak electricity consumption by 18% compared to last year. The measures, along with a faster-than-expected upturn in thermal electricity generation capacity, helped Japan avoid any rolling blackouts this summer.And in early September, government restrictions on electricity usage were lifted. Given the public disapproval of Japanese power companies following the nuclear incidents this year, the time seems ripe for discourse over fullscale industry liberalization. Whether the equally unpopular Democratic Party of Japan can achieve that goal remains to be seen.
The Impact of Uncertainty
While markets act like toddlers over the short term, what are the key drivers over the long term? The impact of the European crisis on global growth will be the key determining factor on market performance. Small, open economies such as Hong Kong, Singapore and Taiwan will likely be more greatly impacted. Countries with domestic consumption as large drivers of GDP, China, Indonesia and India, might be relatively sheltered due to their relatively large internal markets. While risk aversion may cause markets to overreact in the short term, we believe long-term structural growth should continue.
Postcard from Thailand
The Phue Thai (PT) Party led by Yingluck Shinawatra has already been voted into office, and various policies aimed at boosting domestic consumption have largely been expected. Changing consumption patterns that result from rising disposable income are likely to be pleasant challenges for Thai retailers. These challenges include finding the most complementary tenant mix and investing in information technology systems to monitor tenant sales and foot traffic. As always, we continue to research company fundamentals, but will note the efforts companies make in establishing long-term strategies.
China as an Asset Class
China's economic expansion over the last 30 years has allowed many enterprises to prosper. For a number of investors, Chinese stocks have also grown in importance. As modern capital markets have taken root in China, stock markets have become one of the primary channels for companies to raise capital. While China's capital market is still early in its development and has its own risks and challenges, the country is expected to continue to grow and increasingly influence world economies. For a variety of reasons, we believe China is emerging as an investment asset class in its own right.
APEC Forum Convenes
The Asia-Pacific Economic Cooperation (APEC) forum, representing 21 Pacific Rim countries, kicked off a summit this week in San Francisco. The summit will address issues including energy, transportation and womens economic participation in preparation for an APEC heads of state meeting in Hawaii this November. The topics being addressed during the summit are of great interest to those seeking to understand some of Asias long-term growth trends. Female participation in Asias labor force can be quite low.
Fast and Furious in India
Indian social activist Anna Hazare recently generated bipartisan debate, waging a 12-day hunger strike to pressure the government to pass stringent anti-corruption laws. It ended with a government resolution to acknowledge his key demandsmost notably, the creation of an influential anti-corruption ombudsman. Mainstream political parties have also called for such an ombudsman, however, with more limited sway due to concerns that officials may not be able to function effectively if all decisions were to fall under the purview of an intermediary.
The Dilemma of the Yen
Last month, Japan took steps to help its economy ride out the surge in the yen. What the market may be overlooking, however, is that thus far Japanese companies are managing relatively well under the new 80-yen regime. The most recent operating margins appear to be a bit higher than the historical average of 4.5%. Nobody can accurately predict where the yen will go from here, but its current strength is a double-edged sword. While it can make Japanese exports less competitive, the strong yen also boosts Japans purchasing power abroad.
Changing Times for China's Smaller Industries
Over the past three years, Chinas small and medium businessesparticularly export-oriented firmshave been through particularly choppy waters amid continued global economic weakness. However, the challenges they face today differ somewhat from those of the 2008 financial crisis. For starters, the former crisis brought about a meltdown across all China's small and medium enterprises (SMEs), regardless of their sector or business model. In todays environment, it is the SMEs with labor- and capital-intensive business models that are not faring as well.
The Slow Build-Out of True Democracy
Long-term investors should care about not only the growth of Asian economies, but also the development of these societies as stability and transparency are generally rewarded with higher valuations. Implementing the rules of a democracy can happen with the stroke of a pen, but growing a true culture of democracy takes time. For Asian nations to find long-term stability, and capitalize on the regions impressive economic development to date, requires a focus on building out their soft infrastructure.
Another Look at China's Property Market and Financial System
There continues to be much debate over whether Chinas growth is balanced and sustainable, and many observers will demand you side with one camp or the other: extremely bullish or bearish. This month, Chief Investment Officer Robert Horrocks, PhD, takes a more nuanced view in examining the drivers behind Chinas real estate market and evolving financial system.
Weekly Aisa Update
Italys government bond yields have been spiking as investor concerns threaten to become self-fulfilling prophecies that raise the specter of default in Italy and dismemberment of the euro. While, China is stepping more than a little lightly on the monetary brakes, along with other countries across Asia, over fears that inflation is getting out of control. And the markets response is to push up the price of U.S. bonds and sell down equities across the globe. Obviously, slowing growth is of far greater concern to investors than the opinion of the rating agencies.
Results 351–400 of 490 found.