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Where to invest in Asean: UOB AM

Where to invest in Asean: UOB AM

UOB Asset Management is overweight Singapore and Thailand, neutral on Indonesia, and underweight Malaysia and the Philippines, says Victor Wong, senior director and head of Asean equities.

Speaking at a press briefing in Singapore, Wong said Singapore is a beneficiary of a synchronised global growth environment, and the positive surprises in consensus earnings estimates could support further upside.

Among the main sectors in the Lion City, Wong is overweight financials due to its stronger loan growth and improving return-on-equity ratio. He is also overweight real estate and expects the sector’s recovery to continue in the first quarter.

In the case of Thailand, Wong said the country’s growth-domestic-product will continue to rise in 2018, thanks to sustained exports and tourism, along with recovery in domestic consumption.

Furthermore, on 1 January, Thailand introduced its Eastern Economic Corrido (EEC) project to direct more than $45 billion foreign investment into its three eastern seaboard provinces: Rayong, Chonburi, and Chachoengsao.

As such, foreign investors are waiting to put more money into the Thai economy because of tax incentives.

Indonesia, Wong said the country has always been a place that investors should watch out for, given the size of its economy.

‘So for this year, why we are neutral on Indonesia is because consumption remains weak, though valuation looks alright. Certain sectors of the market are not responding positively to the government’s recent rate cuts. So this part is a bit disappointing.

‘The GDP growth of 5.0% was below expectations. We think there is a chance that Indonesia will come back with a stimulus package or consumption pickup too, so we will be watching this,’ he explained.

Wong is not positive on Malaysia due to the political uncertainty surrounding the upcoming general election.

‘But Malaysia has filled with a very favourable tailwind with the high oil price. That has actually been something again the market has to watch very closely.’

Similarly, the executive is not positive on the Philippines because of its unattractive valuations.

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