Speaking to FSA‘s sister publication Portfolio Adviser, Rhee said that Asia is changing rapidly, but after the financial crisis entered an environment of ‘sub-normal’ growth.
He said growth will be found in smaller, higher-quality businesses, rather than large businesses driven by global macro tides or a big government push.
“Asia is now escaping from the multi-decade, top-down driven market place and now is when stock pickers will do well,” he said.
Adding: “If you look at China, recent reform initiatives have propelled companies with new business models from new industries; It is similar to the sub-normal growth phase in the Western market in the 1970s, when high quality names really outperformed the market for a considerable period of time.”
According to Rhee, while it is important to recognise that Asia is made up of a large number of different countries, with vastly differing cultures and business models, focusing too much on single countries is not necessarily the best way, especially if one is approaching things from a bottom-up stock picking point of view.
“A lot of quality companies with a high potential for growth and scalability are regional rather than country players. For example, if you look at some of the more promising Thai tourism companies, they are heavily focused on capturing the Chinese tourism market.”
