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FSSA Investment Managers Asia Pacific webcast: Positioning for Reflation

How is the FSSA Asian Growth portfolio positioned in light of the challenging market environment? Firstly, we should note that we are agnostic about indexes.

Martin Lau, Managing Director of FSSA Investment Managers presents the Asia Pacific equities strategy client update.

In response to recent questions from our clients, we had a conversation with Martin Lau, managing partner and lead portfolio manager for the FSSA Asian Equity Plus and FSSA China Growth strategies.

2020 was indeed a very special year. The whole world was in a recession, due to the pandemic and strict lockdown measures imposed by governments all over the world. Yet, at the same time, all asset classes, including equities, had a very good year in terms of returns.

Learn more about investing in Asia Pacific equities with FSSAIM today. Our APAC investment funds are invested for sustainable, long term growth.

Lee Kuan Yew, although somewhat a polarising figure, perhaps understood state power and the human condition better than anybody. Consequently, Singapore has often been criticised as much as it has been greatly admired. Irrespectively and without question though, the country has gone from strength to strength.

With over 20 years managing money in China I have seen significant changes both in the corporate and investment environment. One of the biggest shifts that has occurred is the fact that China is not short of investment capital.

Richard Jones, Director at FSSA Investment Managers, heads up the FSSA Asia-Pacific strategies and looks back on 2021 in the video below.

Alistair Thompson, Director at FSSA Investment Managers, heads up the FSSA Asia Pacific strategies and looks back on 2021 in the video below.

In the Asian markets, investors have gone from “anything, as long as it’s China” to today’s high levels of fear and disbelief, but that is typical when markets fall significantly.

Markets will always do their best to push us to act in a short-term and emotional manner, particularly at times when events become somewhat extreme. These days all of us, market participants or not, seem almost entirely focused on uncertainty rather than promise. This is why having a strong philosophy and process is crucial.

FSSA Investment Managers has been investing in Asia and global emerging markets for three decades. We are conservative investors, and resilience during market sell-offs has underpinned our long-term performance.

In our last client update, written through the depths of Covid-despair, we observed that real life and the world of markets are seldom so intimately entwined. With markets swinging violently to the downside on a riptide of fear, it was clear even then that activity was being driven by short-term anxiety rather than a real evaluation of Asia’s longer-term value-accretion prospects.

Though Covid hasn’t yet finished with us, the markets have finished with Covid. In real life, there is still plenty of misery to go around, but things have seldom been better for investors. Optimism has served us well, as the money printing presses have rolled to counter the “unprecedented” threat.

As Asian countries become richer, they have been transitioning towards consumption-based economies, translating higher per capita income into increased spending across goods and services.

Many people seem to think that money management is about predicting the future. But even with the gift of perfect foresight, the subsequent market reaction to news is often far from obvious.

In boom times like today, when cash costs nothing and capitalisation rates are zero, everybody is focused on growth and the future. Revenue is vanity in the sense that entrepreneurs, thank goodness, dare to dream and build businesses. We too, spend much of our time looking for the next opportunity and indeed thinking about how much businesses can grow.

Fund Manager Q&A

Looking back (though it’s not like we didn’t already know), it is clear that we have been living in an increasingly distorted world. Financially, for the last decade, it has been about interest rates falling to (and staying at) zero in a world of general money printing.

In our last update, we touched on the idea of high-quality companies hiding in small market capitalisations in ASEAN . This, in our view, is due to years of declining foreign-investor interest in the region. These companies are usually not covered in great detail or indeed at all by sell-side research analysts.

As the world continues to lurch from Covid-surges to reflexive and localised lock-downs, everybody is now looking through to a mythical status quo ante bellum – the before-Covid-times, when the world was just hunky-dory.

Every downturn is different – the Global Financial Crisis and the Asian Financial Crisis were primarily debt-related, while SARS and Covid are obviously health-related, with a knock-on effect on growth and consumption.

FSSA India webcast focus on the India Subcontinent Markets and Asia Pacific equities

FSSA India webcast focus on the India Subcontinent Markets and Asia Pacific equities

There have been many disruptions in India over the past decade, with frequent regulatory reforms and a costly Covid-19 experience. However, the positive effects of the reforms are now being seen, with market leaders across sectors gaining rapidly from the formalisation of the economy.

Operating as an autonomous investment team within First Sentier Investors group, we are a team of dedicated investment professionals based in Hong Kong and Singapore.