Asean Forum 2012, Asean’s investment trinity, CLSA

You could argue that ASEAN growth and demographics have long been
overlooked in favour of China. Not this year though. CLSA’s Myanmar-Thai
nexus and Asean Arising reports paint the picture of a region buzzing
with young, cheap labour and increasing wealthy consumers. CLSA’s
Asean Forum showcased corporates from economies as divergent as
Singapore and Myanmar and industries as diverse as telecoms and
alcohol. Outlook is mixed for sure, but Asean’s long-term investment
trinity of global brands, fertile FDI and primed domestic consumption
were all well represented.


Singapore – Domestic strength & O&M adrenalin
q With full employment and negative real interest rates investors were seeking asset
inflation plays, while Myanmar was the concept of the week.
q High oil prices and increasing E&P spend are driving the O&M sector with both
Sembmarine and Ezion order books benefitting.
q Conversely FSL provided a candid view of the extreme difficulty in shipping in 2012.
q Ezion’s lift boats are in demand and payback short and secure, while additional 8
shale gas projects in Qld provide more growth opportunities. Standout BUY.

Indonesia – Opportunities amongst policy risk
q Indonesia was slow out of the blocks this year due to questionable monetary policy
from the central bank and a number of regulatory issues
q We recommend a selective investment approach in 2012 based around 1) the
return of FDI and competition 2) Progress on infrastructure and investment after
years of under-investment 3) lower cost of capital
q Against this backdrop we are OWT cement, property, infrastructure and media,
neutral on coal and consumer and underweight banks, CPO and telecom operators.
q Our key stock picks for this year remain: MNCN, UNTR, BSDE, JSMR, AKRA, TBIG &
ITMG.

Malaysia – Healthcare optimism amidst political overhang
q Interest in Malaysia was certainly lower this year given overhanging political risk.
q Companies which attracted the most interest were KPJ Healthcare (BUY), Hartalega
(BUY) and IJM Land (N-R).
q The property companies which presented were cautious on outlook given tighter
monetary policy and slower GDP growth.
q Healthcare sector was optimistic given rising PPP and insurance penetration.
q Top pick from AF12 is KPJ Healthcare, which trades at 15-20% discount to Asean
peers.

Thailand – Running with the bulls
q Investors came with a bullish bias and left feeling more so.
q Banks, energy, industrial estates, retail, telecoms and food were represented by 11
companies doing presentations and workshops.
q Feedback was that most companies were bullish on the outlook for growth due to
robust domestic demand and future government spending.
q Bangkok Bank, Siam Commercial Bank and Hemeraj Land in particular captured
investors’ mindshare.
q Our top Asean arising picks are Bangkok Bank and CP Foods

Philippines – Strongest interest in recent years
q Lot of forum interest in the Philippines; the strongest in recent years.
q Presenting companies included: SM Prime, Universal Robina, Metro Pacific, Vista
Land, Phoenix Petroleum, Megawide, and Puregold.
q On balance, mining was the most cautious sector.
q Bullish sectors were infrastructure, banks, consumer, and gaming
q Our favourite stocks

Download file : Asean Forum Feedback Final