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Despite a gloomy outlook, there are still plenty of opportunities for investors
Published: 4/07/2010 at 12:00 AM
Newspaper section: Spectrum
Despite ther lower than expected increase, some insurance providers argue the 10% CGT increase does make on and offshore bonds more competitive compared to collective investments.
After a tough two months when business was disrupted because of political unrest, a Bangkok-based international financial company is again seeing foreign clients, fund managers and bankers return to channel deals, mainly to emerging markets.
Neil Robbirt, chief executive of Global Investments (Far East) Ltd, said he considered moving to his company's Hong Kong office at the height of the unrest because the 8pm curfew was crippling the company.
"I think all businesses were affected, even financial advisers such as ourselves," he said. "It affected everybody, but I am pleased to say that this month things seem to have got back to normal - as normal as they can be for Bangkok - and our business has returned."
Although the international economic picture is still cloudy, some of Global's clients in the region are quite optimistic about investment. In their view, even as Europe and the US still face economic problems, emerging markets still look attractive. These include Thailand, Malaysia, Singapore, Taiwan, South Korea and of course the BRIC group - Brazil, Russia, India and China.
"The Thai stock market is doing well, posting pretty good growth, even bizarrely last month you saw the SET rising even when protesters tried to set it alight and they had to move to temporary accommodation," said Mr Robbirt.
Across Asia, meanwhile, gross domestic product growth is very strong with China still leading the way with a forecast of close to 10% expansion this year.
 "Interestingly in the BRIC emerging market countries, Brazil is No2, followed by India. A lot of western companies are looking toward Asia Pacific for business, labour is still cheap compared to Western countries, the quality of goods is much better than it used to be ... both India and China are buying the technology, so if they build a car in a factory in China it will be the same as one built in UK or Germany."
While this is the right time to invest in emerging markets, be it Latin America, certain parts of eastern Europe, Southeast Asia or the whole of Asia, Mr Robbirt said that in Europe it is Asia that tends to get more publicity than Latin America.
Although it would be easiest to invest in a BRIC fund, there are other interesting sectors as well. For example, Global has exposure in Indonesia which is showing very good GDP growth, second behind China. It has also invested in a Malaysia-Singapore fund.
"Singapore is very, very solid. I think the advent of relaxing the rules for casinos is going to help the economy. There are funds out there that are a combination of Singapore and Malaysia," he said.
"Hong Kong is still a safe bet, still a very solid economy. In Thailand, some very good international Thai funds are investing in the market, investing in some of the successful groups and companies here. A lot of Thai companies are expanding into China, India and America especially on the food side - the CP Group is exporting many ready-made meals around the world.
"Latin America - there are good and bad bets. I mean Venezuela was a good place to have your money 18 months ago but it isn't now because the economy is going from bad to worse. Unfortunately it's becoming an economy that is a closed economy and when you start nationalising the private assets that is a problem.
"When you start kicking out foreign companies and taking over their assets that doesn't make you popular on the world stage.
"So Brazil - fantastic opportunity, good place to have your money - certain eastern bloc countries - Poland - a good place to be, I think Russia is a good place to be."
Mr Robbirt said the Australian economy was also still robust with the financial sector solid, but he is wary about the mining sector because the Australian government recently introduced an additional tax on mining companies. Miners complain this will push up their costs at a time when exploration is becoming more expensive anyway, because they have to dig deeper in many areas to obtain viable reserves.
Now one can get a 6% return on bank deposits in Australia, but Global is offering 7.5% net.
However, nothing seems to be shining brighter than gold right now.
"Gold is so strong now it is pulling up other precious metals ... and some people are forecasting that silver will go up by another 25% by the end of the year.
"Silver is in demand, it's used for solar energy. That props up the silver price but it rises on the back of gold because it's the second precious metal after gold, so when gold goes up other precious metals are coming along."
While the US stock market has been a good place to invest over the past 12 months and Global has clients who have invested in aggressive funds, Mr Robbirt pointed out that the investment timeframe here should be perhaps two to three years, not three to six months.
"You could also say that about Europe of course - the FTSE in the UK, Spain and Portugal. I think some of the property funds, Iberian property funds that would invest in Spain, Portugal, Greece and places like that - what a great investment if you are willing to sit on your money for five years because it's so cheap to buy."
Mr Robbirt said there was no doubt that both Europe and the US will recover and although both the US and the UK have massive balance-of-payments deficits, they have become a part of life.
"Europe is a good place to have your money in the medium term but for short-term growth this year, we wouldn't be there," he said.
"So on that basis why would you leave your money there? It doesn't make a lot of sense when there are all these emerging markets."
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2010