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Introduction
ASEAN Matters. Come meet with high-level policy makers, industry leaders and decision makers at our 5-day 2012 ASEAN Conference to be held in Indonesia and Singapore on 25-27 June 2012 and 28-29 June respectively. The ASEAN region boasts a combined population of >590 million; an abundance of natural resources; a large, productive and young population; rising affluence and private consumption; and expansionary fiscal policies. Discover more about ASEAN's turnaround and 2012 investment outlook; we look forward to seeing you at our conference.
Singapore
Singapore is a relatively inexpensive market (the cheapest in ASEAN) and is leveraged positively for when the export cycle tunes up. Compared with 10 years ago, Singapore has deepened its links with ASEAN and the rest of Asia, helped by its Pan-Asian population and its attractiveness as a global business and finance center, with strong transport and communications infrastructure plus its strategic position as a hub for trade flows between Asia and Europe. Besides its historical focus on trade and manufacturing, Singapore is also quickly building up its wealth management and intellectual property sectors.
Indonesia
The structural growth story remains intact, and the current market turbulence may provide attractive opportunities. The country's large population, with low but growing per-capita income, places Indonesia in a position to emulate the success stories of China and India. The economy is in a transition phase, moving away from a dependence on commodities/external flows to broader-based growth. Investment has risen; the current account remains in surplus; and its foreign exchange position is robust. GDP growth remains solid and should be among the fastest in Asia-Pacific over the next two years due to the country's relatively smaller dependence on exports.
Malaysia
Malaysia's valuations do not appear cheap on a relative basis, as it remains a low-beta market, outperforming the region in 2011. That said, we still expect upside from the market with returns likely to be front-loaded. The upcoming general elections in 1H plus implementation of more publicly-funded Economic Transformation Projects in 2H could help provide offsetting support to its very export-driven economy. In addition, low foreign shareholdings, underinvested local funds and Malaysia's defensive market should allow for further outperformance in 2012.
Thailand
We maintain our bullish call and expect a V-shaped economic growth patten to drive the SET in 2012, with an expected target level of 1,275, implying a P/E of 13x 2012E. Following the worst flooding in 50 years -- which devastated the country's economic production base in agriculture, manufacturing and public infrastructure -- we expect reconstruction to be a potent engine, with FY12-13 growth to be driven by full-blown government investment activities and private investment by MNCs, local businesses and households. We expect to see a recovery in growth and exports from 2Q2012 onwards. The conference is well timed for investors to reexamine the impact and recovery from the floods.
Philippines
We see selective buying opportunities in the Philippine market. While the Philippines may not be immune from global economic weakness, we believe that that current macro conditions have defensive characteristics that could cushion downside risks, particularly in terms of strong reserves, an improving government fiscal position providing greater flexibility to stimulate the economy, stable domestic consumption supported by resilient remittance flows, and healthier corporate and banking sectors. Key catalysts for the next 12 months include execution of the government's delayed infrastructure program and potential credit rating upgrade.
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Information
Agenda
