Barings says Thai stock remains very attractive, reporting strongest earnings growth in ASEAN

English: The flags of ASEAN nations raised in ...

English: The flags of ASEAN nations raised in MH Thamrin Avenue, Jakarta, during 18th ASEAN Summit, Jakarta, 8 May 2011. (Photo credit: Wikipedia)

Increasing levels of direct investment from multinational corporations and strong predicted earnings’ growth is driving clear investment opportunities in the Asean region, according to Baring Asset Management (Barings). The firm also believes that Thailand remains very attractive, reporting the strongest earnings growth in the region, with growth particularly robust in the country’s financial sector. From 2000-2011, net foreign direct investment (FDI) into the Asean region increased at over 400% with particularly strong momentum over the past three years to the point where gross FDI into Southeast Asia matches China in terms of volume. This level of international investment bodes extremely well for future economic development, believes Barings, notably with regard to the positive impact on social well-being and consumer spending. SooHai Lim, investment manager of the Baring Asean Frontiers Fund comments: “We continue to see very good growth prospects in the Asean region. Multinational companies are increasingly considering a ‘China+1 strategy’ for the geographic diversification of their manufacturing bases. Tensions between Japan and China over the past 12 to 18 months have, in part, driven this, with factory relocation or manufacturing plant diversification becoming an increasingly important consideration to reduce the implications of any further political tensions, should they return.” Barings also notes that selected Asean countries such as the Philippines have reported faster GDP growth year-on-year (7.8%) than China. The firm also believes that Thailand remains very attractive, reporting the strongest earnings growth in the region, with growth particularly robust in the country’s financial sector. (source)

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