All eyes on Asia-Pacific

Investors look at region due to its high growth potential, low debt

KUALA LUMPUR: Asia-Pacific ex-Japan equity markets will remain as attractive investment destinations due to their high growth potential and relatively low debt levels compared with the Western world.

Asian companies, specifically, had improved their financial standing and embraced disciplined capital expenditure over the past decades, said BlackRock director and portfolio manager Joshua Blaise Crabb.

Citing economic data, Crabb said, for example, Asian companies' debt/equity ratios were below 30% last year compared with more than 80% in the 1990s.

“We would expect this to translate into higher dividends and earnings growth,” Hong-Kong based Crabb said at a briefing hosted by AmInvestment Bank Group.

Crabb, who is a member of global investment giant BlackRock's Asian equities team, said BlackRock was invested in selective Malaysian stocks, related to crude palm oil.

Meanwhile, AmInvestment director for retail funds, funds management division, Ng Chze How said that in the first three months of this year, as much as US$150bil (RM450bil) of hot money had found its way into Asian markets. “This is against a net outflow during the same period last year,” Ng said.

As to how long the hot money would remain in the markets, Ng said he believed this was for as long as the Western markets showed instability in their economic growth trends.

Asian markets were still trading at an average of 20% discount against their peaks in the last decade, he pointed out, suggesting buying opportunities for stocks remained.

AmInvestment currently manages about RM30bil in funds while BlackRock's assets under management total US$3.513 trillion across equity, fixed income, cash management, alternative investment, real estate and advisory strategies, according to its website.

It is understood that both firms would be collaborating soon although details of the partnership remain unclear at this stage.