HWANGDBS EXPECTS ASIA'S EMERGING MARKETS TO BE IDEAL INVESTMENT REGION NEXT YEAR

KUALA LUMPUR, Nov 9 (Bernama) -- The emerging markets of Asia will be the best
region to invest next year and over the long-term due to its solid fundamentals,
strong corporate and government balance sheet, a survey by HwangDBS Investment
Management Bhd has indicated.

Amid this, investors should focus on capital preservation and high quality
income-type investments by positioning their portfolio primarily in high-grade
bonds, and the rest in income-yielding credits and dividend-yielding
corporations in the region, the investment research company suggested.

"The focus next year is capital preservation and income due to slowing global
growth and an expected extended low interest rate environment in developed
economies," said its Chief Investment Officer David Ng in a research note here
Tuesday.

"Besides, statistics have proven that more than 40 per cent of historical total
shareholders' return in such corporations were contributed by dividend yields
and 10-year cumulative returns have proven that such stocks have historically
outperformed the broad index."

Dividend-yield play may sound boring, but it works. Nevertheless he added that
not all dividend-yielding stocks will guarantee returns and this would be where
a fund manager's skills in stock-picking would be key for delivering results.

On the region's performance, the note said that the estimated government debt
this year accounted for only 25 per cent of its Gross Domestic Product (GDP)
compared to the European government's debt size of about 80 per cent of GDP.

Corporations in the region also have lower corporate gearing which is expected
to continue trending down by next year to 15 per cent debt-to-equity ratio.

It said Malaysia has also become one of the emerging economies expected to
garner interest from the international market.

"Their long-term growth story which will be supported by the Economic
Transformation Programme projects is expected to generate six per cent yearly
growth aimed to propel the nation to a high-income society."

The master plan, the local bourse's fair valuations with price-earning ratio of
14.4 and analysts upgrades of corporate earnings estimate to 2.7 per cent going
into next year versus 2.1 per cent the year before, have attracted foreign fund
inflows from investors searching for opportunities beyond their shores.

Ng also does not expect a double dip recession despite a slower global economic
growth.

"A 'soft landing' or the situation where growth activities are decent enough to
avoid a recession but cool enough to avoid overheating in the global emerging
markets will be expected next year," he said.

He added that such a landing would be ideal for emerging markets, especially
Asia, given concerns of overheating in certain asset classes such as the
property market in China.
--BERNAMA