Even though more bad news is expected next year, Asia still offers great investment opportunities as the region faces less impact from the global financial crisis, an official at Aberdeen Asset Management Asia Ltd said last week.
“Asian businesses on average have a debt ratio of only 20 percent, much lower than their counterparts in the US and Europe,” Aberdeen Asset managing director Hugh Young said at a press conference on Thursday, while announcing the opening of the company’s first office in Taipei.
Taiwan Mobile Co (台灣大哥大), the nation’s second-largest telecom operator, and Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker, represented good long-term investments as both companies have sound operations, Young said.
Aberdeen obtained a master agent license from the Financial Supervisory Commission in October, allowing it to directly promote and sell its fund products in Taiwan through third-party sales agents.
In the past, Young said, people often believed that emerging countries in Asia were decoupled from advanced economies. But Asia’s growing relationship with the world economy has made itself unable to escape global recession.
While individual Asian economies are still able to maintain stable growth, it is also evident that even countries like China and India — which once enjoyed rapid economic growth — are now facing spiraling downward risk, he said.
The slowing economic growth is likely to continue taking its toll on Asian businesses, which Yang said could lead to declining profits in other Asian economies in the next 12 to 18 months or even cause firms to cut capacity and staff to downsize operations.
Looking ahead, Young said he expected governments around the world would continue to implement loose monetary policies and inject capital into the banking system to revive lending.
“As market consolidation will cause the gap between strong and weak businesses to widen, companies who have sound operations and high cash positions are worth investing [in],” Young said.
Established in 1983, Aberdeen has Asian offices in Singapore, Australia, Hong Kong, Malaysia, Thailand, Japan, South Korea and China.