AsiaUSA Market strategy, Not just Chindia: Asean arising, CLSA

With 37% of its population under 20, Asean’s labor force is set to grow by
more than 56 million this decade as China’s labor force begins to fall,
setting up the region as the next low-cost manufacturing zone. Rising
disposable incomes will lift 50 million people into the middle class while
13% pa growth in discretionary spending power unleashes a wave of
consumerism. Our top ten Asean-USA picks are: Chevron, Coca-Cola,
Hess, Las Vegas Sands, Mead Johnson, National Oilwell Varco, Philip
Morris International, Starbucks, Western Digital and Yum! Brands.


Hot in some places, thawing elsewhere
􀂉 US trade in goods with Asean nations amounted to nearly US$195bn in 2011.
􀂉 The ratification of the Trans-Pacific Partnership, a free-trade agreement, would link
the USA to several Asean nations and create its fourth-largest export market.
􀂉 Meanwhile, restoration of US-Myanmar diplomatic relations signals a thaw.

The Asean opportunity
􀂉 Asean’s workforce will rise by 56 million people in this decade, growing steadily at
1.4% per year – meanwhile, China’s workforce will shrink.
􀂉 Manufacturers will likely redirect investment and jobs from China to Asean to take
advantage of the region’s more favorable demographics.
􀂉 Notably, FDI in the Asean region surpassed pre-financial-crisis highs by 18% in
2011 and has run at levels three times those in India.

Unfolding consumption story
􀂉 More than 50 million people are set to pass US$3,000 in disposable income by
2015, bringing Asean’s middle class to 160 million.
􀂉 The rich will get richer as the number of high-net-worth individuals in the region
doubles to 400,000 by 2015.
􀂉 This will present huge opportunities for consumers – and for the companies that
produce the goods that Asean’s new middle class and newly rich want to buy.

US companies poised to rise with Asean
􀂉 We highlight Chevron, Coca-Cola, Hess, Las Vegas Sands, Mead Johnson, National
Oilwell Varco, Philip Morris International, Starbucks, Western Digital and Yum!
Brands as those companies under coverage that have meaningful or growing
exposure to Asean.

Download file : AsiaUSA Asean Arising