In this video, co-CIO of Mirae Asset Global Investments (Hong Kong), Rahul Chadha, talks about Asia as an attractive location for equities given the current protectionist climate, the benefits of investing in a specific company rather than the firm’s entire industry, multi-year portfolio themes, as well as China’s role in the Fourth Industrial Revolution.
Thanks to Real Estate Investment Trusts ETF and Straits Trading, investors will be able to track REITS outside of Australia, Japan and New Zealand. Therefore, investors will be able to get greater exposure to these REITS in Asia. In addition, they’ll have another option on the Singapore Exchange.
This particular ETF is benchmarked to the FTSE Russell Epra/Nareit Asia ex-Japan Net Total Return REIT Index; which forms part the benchmark which is used for ETFs. It has approximately US$10 billion (S$14 billion) in funds tracking it. The underlying portfolio of the ETF, according to Phillip Yeo, head of International Product at Nikko AM, is to deliver a gross yield of approximately 6 percent. this is based on Bloomberg’s forward yield weighted average calculation for the 23 REITs. He further believes that the fund should be able to “deliver at least a 5 per cent yield fairly regularly, in line with Epra/Nareit Index’s historical range of 5 to 6 per cent.”
Meanwhile the status of REITs in Singapore is changing from when they used to be incredibly popular due to their reputation for high yields, property and steady income. Now though, trust holders are not faring as well since the industry does not look all that good. Even though indicated dividend yields remain untouched as return on assets dip. Still, if the REITs can pay out the large dividends that the investors are hoping for, this is only because of leverage.
Ultimately though, Christopher Langner concluded: “The outcome may not be so bad, simply because there are stronger REITs and potential buyers of those very assets, in spite of their dwindling returns. It’s almost a rule of thumb among Singapore bankers that once a REIT’s shares trade below 70 percent of net asset value, it’s just a matter of time before a buyer comes in.” It is that which investors have to hang on to.
For those travelers looking for options for five-star hotels in Vietnam, the Amanoi resorts and residences are a great choice. Located along the southern coast of lush, Southeast Asian country, they offer the perfect balance between luxurious accommodations and an authentic exotic experience.
In particular, Amonoi is situated right between one of Vietnam’s most beautiful national parks, Nui Chua National Park, and an exquisite marine reserve. Adventurers will find miles of untouched wilderness as they hike peacefully through a green tropical forest teaming with a rainbow of flowering plants, colorful birds, and towering trees. At the marine reserve, visitors come to explore the pristine waters of the Vinh Hy Bay, filled with rare coral, uniquely vibrant schools of fish, and a beauty and serenity impossible to describe.
Back at the resort Amanoi’s five-star hotel, status is clearly evident. Guests can treat themselves to the pampering of a host of treatments along the shores of a tranquil, lovely lake covered in deliciously fragrant lotus blossoms. There are specialty scrubs, facials, hair care opportunities, and both half-day or whole-day wellness experiences. Amanoi offers their own brand of all-natural products to complete the perfect spa experience.
Dining at Amanoi is an unforgettable experience. Open to non-residents as well as hotel guests, all enjoy the freshest fish from the Vinh Hy Bay, delivered anew each day straight from the fishing boats that ply the bay for its incredible culinary delights. The fish is prepared with traditional simplicity using local ingredients, resulting in an incomparable dining experience. The meal is unforgettably complemented by a panoramic view of the bay beyond the green, rolling hills of the surrounding area.
Amanoi offers the option of the purchase of a villa. Owners have access to a private beach and all of the resorts amazing facilities, including the Aman Spa overlooking the lotus-filled lake. The incredible location, superior accommodations, and abundant dining choices collaborate to make an Amonoi Villa purchase an amazing life-style choice.
Although there are some fears of Tokyo’s poor attempts vis-à-vis deflation, the GDP data indicated substantial growth – more consistent than at any time since 2013 of four consecutive quarters. On the other hand, the annual figure remained lower than that of the 1.2 percent increase that was registered in 2015. In addition, Japanese consumers are living cautiously.
According to Merrill Lynch Japan Securities Chief Economist Izumi Devalier, what Japan is currently encountering is an “export-driven recovery.” Given the limits on private consumption, growth will be thwarted unless that changes.
Meanwhile, the PM, Shinzo Abe, in Dubai (following his recent visit to speak with Trump in the US), said that the UAE’s creation of an “oasis of tolerance” would be tantamount in future economic bolstering in the Asian region. With its recent launch of both the Ministry of Tolerance and the Ministry of Happiness, he believes such efforts will result in a broader platform for doing business, which will in turn benefit Japan. And in Japan, given the benefits of their unique educational system (incorporating both self-discipline and mutual cooperation while encouraging the development of courage justice, and loyalty), he believes that “the Japanese government’s investment in education is one of the reasons for the rapid economic recovery that took place after the Second World War.”
With the Samurai ethos of courage, loyalty and justice practiced in Japan, it has the potential to become even greater in its economic platform.
According to a report set to be released at the upcoming Dubai Annual Investment Meeting undertaken by the Abu Dhabi Global Market (ADGM), within West Asia, figures for 2015 showed that the most FDI was received by Turkey and then the UAE. Regarding this, vis-à-vis the UAE, CEO of the ADGM’s Financial Services Regulatory Services, Richard Teng said:
“ADGM is pleased to be part of the AIM 2017 that brings together local and international industry leaders, policy makers, and the investment community to share best practices, discuss industry developments and establish new partnerships. FDI is a key contributor of UAE’s economic and investment growth. As an international financial centre, ADGM works actively on efforts and initiatives that enhance UAE’s and Abu Dhabi’s strength as an attractive financial and investment destination for local and international entities.”
Meanwhile in Indonesia FDI figures were not as promising. There was a significant deceleration in Q4 16. That could lead to a thorn in the side at efforts being made at bolstering the growth of the economic expansion in the region. It has been suggested that this might be the backlash of Jakarta’s political tensions due to this month’s regionals and Trump’s presidency and thus are concerned about prospects for emerging markets. Still there was a 2.1 percent increase in FDI in Q4 16 vis-à-vis Q4 15 but that was the smallest increase in the last five years.
Vietnam had better figures. It encountered a 9 percent FDI increase in 2016, resulting in a record US$15.8 billion for that time frame. And from the end of 2015, the manufacturing industry encountered a staggering 13.61 percent increase.
So overall FDI in the region is not faring too badly but political climates have to – as always – be handled.
Foreign investors who are seeking a strong investment region should look into Asian investment trusts according to some experts. As the economies there mature, and the youth is indicating signs of good long-term prospects, the area is ripe for investments.
Despite the fact that in early 2016 Asian markets did it tough, things picked up during the rest of the year and the region encountered economic growth as well as company profits, both of which bolstered confidence in the Asian economy. For people in the UK this fact has been particularly welcome. The Asia investment trusts delivered great returns, along with other overseas trusts, since when they converted back into pounds stirling, the returns are increased as the pound drops. As Head of Global Small Cap and Asia, Matthew Dobbs explained:
“Sterling returns have obviously been flattered by the weakness of the pound following the Brexit vote, but regional markets have made some progress thanks to the stabilisation of the Chinese economy, accommodative monetary conditions and modest expansion in economic activity. For 2017, we remain concerned that near-term stabilisation in Chinese economic conditions has been at the price of delayed economic restructuring and ultimately unsustainable credit growth. On a more positive note, global recovery would be helpful for the region, although subject to no material increase in trade barriers. With new leadership in Taiwan, the Philippines and, potentially, Korea, political developments will remain a focus.”
Furthermore, according to the Asian Development Bank’s recent report Asia’s $527 billion made it the top FDI destination in 2015. And of the $1.76 trillion international FDI, almost a third went into Asia. The increase in Asia from 2014 was 9 percent.
First up, the largest (by revenue) airline in Japan, ANA, is looking into making more investments in other parts of Asia. This is because it is trying to decrease its reliance on a slow-growing domestic market.
Numbers in Asia are looking good. This year, the MSCI Asia ex-Japan Index returned a stable 5.3 percent. The JP Morgan Asia Credit Index measured Asian bonds at increasing 5.8 percent over the same time frame. In general, it seems that Asia is currently an attractive host for investments. According to Chairman of the Singapore Economic Development Board, Beh Swan Gin, despite international uncertainties, Asia has kept up its perception of being a bright spark, thus attracting investment from all around the world.
Meanwhile, Singapore-based GIC has committed to investing $260.7 million in PT Nusantara Sejahtera Raya, a firm that runs the largest cinema chain in Indonesia. this is indicative of the firm’s confidence in the long-term growth potential in the region.
While South Asia was deemed the fastest growing economy in the world in 2016 by the World Bank, it has simultaneously been ascertained as being the least integrated, rendering its communities unable to benefit from intra-regional trade. It seems that the countries within South East Asia are not reaping the benefits from the boom.
According to a report, South Asian Regionalism: What Hopes After SAARC Meltdown authored by the Sagar Prasai Foundation:
“Today, less than five per cent of South Asia’s trade occurs within the region, which remains the least integrated in the world. In comparison, intra-regional trade in the Asean region is around 30 per cent, the European Union around 60 per cent, and continental Africa around 12 per cent. This stands as a regional loss ready to cut-short South Asia’s rare moment at the top rung of the growth ladder.”
It is further anticipated that the South Asia region will hold this spot in the international economic growth chart well into next year. The consumer class is prospering, the young population is high at 1.6 billion and everything else looks good for them to continue being an attractive location for foreign investors. Furthermore, the imports in 2016 matured at a remarkable rate of 7.2 percent.
Looking at some examples in the region we find that with the opening in Singapore of DHL Express, established firms are taking advantage of the benefits of the region’s fast-developing cross-border trade. The facility – (located at Changi’s International Airport) – valued at $93million – is expected to be used to build up DHL’s ability to process the burgeoning number of mail and parcels being transported from and within the entire South Asian region. According to Ken Allen, CEO of DHL Express, opening up this branch in South Asia’s hub is one of “the most recent in a series of global network investments made, and is the largest infrastructural investment in Singapore to date. The country’s strategic location not only boosts our operational network capabilities, but also supports growing trade in the region aided by a stronger global economy.”
In the last quarter of 2016, when it comes to stocks, look toward Asia, implies Daniel S. Kern, CFA, CFP in a piece subtitled ‘Invest in Asian Small-Caps.’ US stock prices are relatively high, and those in Japan and Europe are much cheaper. Watch out for political decisions as well as policies made by the central bank, as they too will have an impact on Q4 markets, most notably. Globally this refers to the US presidential election, the Italian constitutional referendum and the Brexit fallout.
For those seeking guidance on such investments, Glen R. Wakeman, co-founder of LaunchPad Holdings LLC, having lived and worked in both America and the east, has expertise. Launchpad has conducted many capital market transactions and raised substantial monies of new equity and lead large organizations in Fortune 10 companies. The firm also offers “an energetic ecosystem of advisors, thought leaders, accelerators and capital providers.”
Looking further into Asia, we find the Matthews Asia Small Companies Fund that makes investments into small firms throughout Asia (apart from Japan) which have the capacity for sustainable growth. Its focus is the small firms which are connected to Asia’s domestic demand and have holdings in “consumer-related and healthcare sectors that benefit from rising consumer spending power and an aspirational population.”
Furthermore, given that the number of global macro strategists in Asia have become “markedly bullish on the region’s prospects,” experts have stated that this has rendered “investment conditions and the economic outlook in the emerging markets seen as the best in 25 years.”
In the process of building a new factory in China, Lego is committed to making “considerable investments in capacity and capabilities” in Asia. Meanwhile, Global Head of Alternatives and Group Head of Solutions for Aberdeen Asset Management, Andrew McCaffery, said that his firm is also looking into the region. Looking to expand into alternatives, they are committed to making investments in Asia as well.
CMBCI (CMBC International Holdings Ltd.) made investments in CARRET Private Investments (Asia) Limited, the private wealth management firm. One of the firm’s founders and current Managing Partner, Kenneth Ho explained: “CARRET has more than 50 years of history in creating long-term value for its high net worth clients, and we believe, that together with CMBCI, we can form a partnership to develop high end wealth management for Chinese clientele.”
Vis-à-vis the region’s infrastructure, it is anticipated that in the decade from 2015 to 2025, approximately US$5.3 trillion ($7 trillion) will be invested into the industry in Asia. Ten years thereafter, it will be worth around 60 percent of global expenditure on infrastructure. According to the 2016 Infrastructure Australia Report, by 2031 Asia will account for around two-thirds of the middle-class population around the world.