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  • 06/05/2016

Baring’s Lim standing in front of the frontier in search for the sweet spots


Diverse Perspectives Create Value in ASEAN Countries

By Tim Gibbens

Barings has capped a strong year by winning a BENCHMARK Retail Top Fund Award in the ASEAN Equity category for its ASEAN Frontiers Fund.

The Fund was launched in 2008 and is managed by SooHai Lim and a team of analysts who bring different perspectives and a wealth of experience to the table. This commitment reflects Barings’ collective approach to asset management, as Lim explains.

Growth And Value Drive Stock Selection

“Our research philosophy is based on trying to identify unrecognized long-term earnings and growth,” explained Lim, “we manage the Fund on a bottom-up basis, seeking firms that can grow faster than the market.”

The team visits and talks to executives from more than 100 companies every year, which allows them to understand management plans, execution abilities and strategies. In turn, they see how these elements tie into their modeling of company’s earnings over a 3- to 5-year horizon. Lim also has an eye on valuations. He wants to avoid overpaying for the growth that the company can deliver for investors and therefore focuses on companies trading at reasonable prices.

Using Safety Nets

Risk management is key. At the company level, Lim says, “The first level of screening is based on the balance sheet to ascertain whether the company has strong cash flows. Leverage is also important, as too much debt could mean too much exposure to unexpected shocks.” The team also prices in country risks while investing. At the Fund level, this covers overall government policy, capital controls, and macro risks. Lim also looks at the strength of the company’s competitive position and margins. He assesses whether the firm has a record of good governance and mitigating business cycle risk.

At the portfolio level, Lim believes that liquidity is critical. He favors companies that are liquid enough so that the Fund can meet redemption demand, if necessary. Lim also considers the impact of macroeconomic variables on performance, “If the team is not comfortable with the overall exposure to these variables, they try to find tools to optimize the portfolio,” he noted.

“Environmental, Social and Governance (ESG) is also important,” says Lim and it ties into the whole investment process. Lim states that companies who comply with ESG standard are less risky and less likely to face lawsuits and environmental litigations.

Market Perspective

Looking at the wider market, “Thailand was among the positive surprises in 2016,” says Lim, “Thai equities performed strongly, led by small and mid-caps, despite lackluster GDP growth concerns about the death of the king which led to short-term volatility.”

2017 will also see important elections in France and Germany. “The year looks to be quite uncertain,” says Lim, “this is because of the backlash against globalization in the US and potentially, elsewhere. Historically, Asian countries have benefited from global expansion. A rise in anti-trade sentiment could impact the region.”

An aggressive US rate hike cycle also poses a risk due to the potential effect on ASEAN currencies. Nevertheless, Lim points out that: “ASEAN is a fascinating and dynamic region, where we see many growth opportunities.”

What Makes ASEAN Special?

Lim explained that ASEAN countries have several advantages – demographic tailwinds and low gearing-to-GDP levels.  This observation is particularly the case of younger countries, notably Indonesia and the Philippines. The team believes that ASEAN companies are well-placed to benefit from higher foreign investments, from Japan and increasingly China.

“We see a lot of exciting consumer businesses in Indonesia, Thailand, and Malaysia,” says Lim, “largely because of the booming middle class.” He also likes the infrastructure theme within ASEAN economies. In Indonesia, for example, President Jokowi’s is increasing infrastructure spending to boost the country’s economy. There are similar developments in the Philippines, where the government is investing to encourage tourism. The improved relationship between Philippines and China is helping the country to attract large numbers of Chinese visitors. Furthermore, travel across ASEAN is increasing as the middle class gains more bargaining power.

Indonesia Stands Out

Regarding GDP per capita, Lim believes that Indonesia is in a “sweet spot” within ASEAN and that the country’s demographic dividend is a tailwind. Indonesia is the largest country in the bloc with a relatively young population. “As the country’s middle class grows and becomes wealthier, people will be able to afford more goods and services typical of a relatively mature economy. This will provide favorable opportunities for companies that can cater to these emerging needs,” noted Lim.

Indonesia’s other advantages include a very proactive government that is aware of the inefficiencies which need to be addressed. Furthermore, Lim believes the telecom sector in Indonesia is mainly attractive because of its relatively favorable competitive dynamics. It is more consolidated than the neighboring countries, such as Singapore and Malaysia. Lim believes that telecoms are a good way to gain exposure to a growing middle class and rising data usage. The industry’s largest company, PT Telekom, is held by the Fund (as of 31 December 2016).

Exploring New Frontiers

Within the frontier markets, the Fund has exposure to Vietnam and Pakistan. Both countries have large populations but relatively low GDP per capita, so have a lot of potential for long-term growth, according to Lim.

However, the team is only attracted if they can find good companies which they believe can deliver strong earnings growth. The team made its first investment in Vietnam in 2009, in a dairy company that had a dominant industry position, strong balance sheet, and a reasonable valuation.

Their recent investment in Pakistan has exposure to selective well-run firms whose valuations are attractive across the whole of Asia. BM

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以多元角度創造價值

Tim Gibbens 撰文

過去一年,霸菱大東協基金憑藉卓越表現,榮獲《指標》年度基金大獎「零售基金 ─ 東協股票類別」。

基金於2008年成立,由亞洲(日本除外)股票投資董事林素亥及其分析師團隊管理。團隊從不同角度出發,以豐富的經驗進行分析。林素亥認為,團隊的貢獻正好反映出霸菱在資產管理方面集思廣益的策略。

選股首重增長及價值

林素亥闡明:「我們的研究理念是嘗試找出潛在的長遠盈利和增長,以『由下而上』的投資基礎管理基金,物色增長速度跑贏大市的企業。」

每年,基金投資團隊造訪及接觸超過100間公司及其行政人員,與他們進行面談,從而了解公司的管理計劃、執行能力及業務策略,然後透過上述元素,擬算該公司3至5年的盈利增長。林素亥亦會留意公司估值,希望避免以過高價格投資於能為投資者提供增長潛力的股票,並會著重以合理價格進行交易。

善用安全網

風險管理至關重要。在公司層面上選股,林素亥解釋道:「首個篩選條件是資產負債表,要確定公司是否備有穩健的現金流。其次,槓桿比率亦是重要考慮因素之一,原因是太高的負債可能意味著公司承擔超出預期的風險。」他續指,團隊進行投資時亦會將國家風險納入造價。在基金層面上,考慮因素包括國家整體政府政策、資本監控及宏觀風險。林素亥亦會留意公司的競爭地位的力度與盈利率,並評估公司是否擁有良好的管治往績,以及減低營商周期裡出現的風險。

在投資組合層面上,林素亥深信資金的流動性是一大關鍵。他偏愛流動資金充裕的公司,讓基金在必要時可應付贖回要求,亦會考量宏觀經濟變數對業績表現構成的影響。他指出:「團隊如對投資組合面對的種種變數未感安心,他們會嘗試尋找方法去優化投資組合。」

林素亥續道:「環境、社會與管治(ESG)亦相當重要。」因為ESG與整個投資過程同樣密切。他認為投資符合ESG準則的公司,需要承擔的風險較低,且公司面臨商業及環境訴訟的可能性亦較低。

市場角度

放眼更廣闊的市場,林素亥表示:「泰國是2016年帶來正面驚喜的國家之一。」泰王離世,為市場出現短期波幅,國內生產總值(GDP)增長未見起色。然而,泰國股票卻表現強勁,主要由中小型股帶動大市。

法、德兩國於2017年相繼會有全國大選。林素亥稱:「預計今年的市場頗為不明朗。基於美國反全球化的情緒強烈,可能蔓延到其他國家。有見過往亞洲多國一直受惠於全球化,這股反全球貿易的情緒加劇,可能會為東協地區的經濟帶來影響。」

美元加息周期過分進取,亦會加劇東協貨幣所承受的潛在風險。然而,林素亥指出:「東協是一個既有吸引力又充滿活力的地區,我們在這裡看到許多增長機會。」

東協與眾不同之處

林素亥解釋,東協國家坐擁多項優勢,包括人口增長,以及國家債務佔GDP水平甚低。這些優勢在年輕國家尤其明顯,特別是印尼及菲律賓。霸菱的團隊相信,東協公司條件理想,可受惠於來自日本及中國日漸增長的更大型海外投資。

林素亥道:「我們觀察到,印尼、泰國及馬來西亞有許多活躍的零售業務。這很大程度上是由於中產人口的強勢增長推動消費。」他亦喜歡東協經濟體的基建投資主題。舉例而言,於印尼,總統佐科威(Jokowi)現正撥加基建開支,推動國家經濟;菲律賓亦有類似的發展,當地政府正投資振興旅遊業。中國與菲律賓關係改善,有助菲律賓吸引大批中國遊客。此外,隨著東協國家的中產階級議價能力有所提升,來往東協國家之間的旅遊亦見增長。

印尼一支獨秀

林素亥指出,在人均GDP方面,印尼是東協內的一大「福地」,由於該國是東協中最大的國家,人口相對年輕,人口紅利是其一大優勢。林素亥強調:「由於印尼中產數目及他們的財富均有所增長,他們將漸漸負擔得起更多成熟市場慣用的商品及服務。為配合冒起的中產需求,這將為更多公司帶來發展機遇。」

印尼的其他優勢,亦包括當地政府主動著力解決低效率的政策。此外,林素亥相信印尼的電訊業極具吸引力,原因是該行業備有相對利好的競爭態勢;相對新加坡及馬來西亞等毗鄰國家,印尼的電訊業的發展亦較為鞏固。林素亥相信,由於中產人士日漸增長,流動數據用量亦不斷攀升,電訊業可開拓潛力龐大的市場。故此,基金已持有印尼電訊行業巨頭PT Telekom的相關股份(截至2016年12月31日為止)。

開拓前趨市場

於前趨市場當中,基金有投資於越南及巴基斯坦。林素亥指出,兩國人口龐大,但國內人均GDP偏低,因而具有很大的長遠增長潛力。

然而,團隊目前僅限投資於他們認為可帶來強勁盈利增長的優質企業。在2009年,團隊首次投資越南市場,買入一間行內佔據主導地位、擁有穩健財務及合理估值的乳製品公司。

團隊最近於巴基斯坦的投資,則着力挑選多間營運良好而估值於亞洲市場具吸引力的公司。BM

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