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India, China, Indonesia top UBS telecom choices

Bharti Airtel Ltd, India's largest telephone company, China Mobile Ltd (中國移動通信) and PT Telekomu-nikasi Indonesia are UBS AG's top three Asian phone picks for investment next year as demand for wireless services in emerging markets drives growth.

Economic expansion and rising incomes in China, India and Indonesia are spurring demand for mobile phones, UBS wrote in a research report today. China and India each added more than 8 million mobile-phone subscribers in October, making them the world's two fastest-growing wireless markets by users.

"We like the mobile leaders in those markets," the Zurich-based bank said in the report. They "should be able to take advantage of rising consumption, elasticity of demand and economies of scale to create shareholder value."

China Mobile, the world's largest mobile-phone operator by users, rose 1.2 percent to HK$146.70 (US$18.82) as of the midday break in Hong Kong trading yesterday.

Telkom Indonesia, the country's biggest wireless company, had climbed 1.8 percent to 11,100 rupiah (US$1.19) on the Jakarta Composite Index as of 11:59am.

China gained a record 8.1 million mobile-phone subscribers in October for a total of 531.4 million, while India had 217.14 million customers, after adding 8.05 million users, data from the two governments showed.

Taiwan's Far EasTone Telecommunications Co (遠傳電信), KT Corp, Telekom Malaysia Bhd and Philippines Long Distance Telephone Co were UBS's other investment choices among Asian telephone companies for next year.

Separately, UBS said it recommended investors buy Taiwan-based Advanced Semiconductor Engineering Inc (日月光半導體), AU Optronics Corp (友達光電) and Wistron Corp (緯創) shares next year, amid slower global economic growth.

"Given uncertainty over end demand, we take a cautious view on first half 2008," UBS wrote in a report yesterday. UBS forecast global economic growth to slow to 4.3 percent next year, compared with 4.8 percent this year.

UBS said Advanced Semiconductor, the world's biggest chip tester and packager, was chosen because it had a low inventory.

The bank picked AU Optronics, the world's third-largest liquid-crystal display maker, Wistron and Compal Electronics Inc (仁寶電腦) because they will benefit from rising demand for LCDs and notebook computers, the report said.

Taipei-based Compal, is the world's second-largest maker of notebook computers, followed by Hsinchu-based Wistron.

Compal rose 0.5 percent to NT$37.90 at 1:06pm yesterday, while Wistron climbed 1.9 percent to NT$58.70.

AU Optronics declined 0.6 percent to NT$63.90.
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