theasiareport Posted June 16, 2014 Share Posted June 16, 2014 Hi everyone, this is my first post here. I've actually been lurking in the background for quite a few years now, and I've profited a great deal from the collective wisdom of everyone on the board, and some great investment ideas like Bank of America and AIG. Just a bit of background info to set up the post. I was actually raised in Asia in Singapore, but I am currently based in London. I started out investing in the US markets before slowly shifting my focus to the "Emerging Markets"in Singapore & Hong Kong. One of the things that I've noticed is that most people regard the emerging markets as a rather homogeneous investment class. But that's really not the case. Its as different as investing in Greece and Germany. While value investing does work in Asia, I think that most people soon realise that applying it without some modification will lead to sub-par results. The corporate governance in China & Hong Kong is startlingly bad, with some unscrupulous owners using their companies as trust funds or piggy banks. Joe Studwell has a brilliant book - Asian Godfathers, that I think anyone considering investments in Asia should really read. I think one of the biggest problems of running pure quantitative screens is that you are going to turn up a lot of companies that simply have questionable accounting numbers. 25% of all China companies listed in Singapore have been delisted or suspended (not taking into account companies are still listed but struggling), which is a pretty startling number if you think about it. I recall how plenty of retail investors were burnt investing in net cash S-Chips (China companies listed in Singapore). That being said, I do think its possible to generate a significant edge in Asia just because competition is so sparse. The markets are dominated by retail investors outside the large cap stocks who love to trade. One thing which most people miss out is that financial statements are available in English in Thailand, Hong Kong, Singapore and Malaysia. That's a universe of under 5,000 companies to look at which lends itself to some incredible investments with little or no coverage on! I've seen some scattered threads here and there on the forum, and I would love to see hear the experiences that people have investing in these countries. Cheers! Link to comment Share on other sites More sharing options...
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