Alex Ingham is the London-based emerging markets fund manager at Aviva Investors. In his role he is also involved with the management of Asian equity portfolios. He shares his views with AsianInvestor about regional equities.
Looking at a one-year period or beyond, what is your outlook for Asian equities?
Ingham: I am positive, although a pause in the current rally is almost certain.
What are the biggest opportunities that you see in the coming 12 months?
Taiwan, given the improving relations with China.
What do you think of Asian equity valuations at the moment?
On a price-to-book value, we are now at 1.7 times the 10- and 30-year average is 1.8 times. The range is 0.9 times to 2.2 times, so valuation is neutral.
What are the biggest challenges that you expect to face?
Estimating whether there will be a double-dip recession in the developed world.
Has the global financial crisis and its impact played out the way you thought it would?
The crisis has been unprecedented.
How has your view of Asian equities changed, if at all, since the end of 2008 when investor sentiment was generally gloomier?
Our view on the region is positive given the strong balance sheets of both corporates and governments in the region.
Have you made any significant changes to your asset allocation in terms of markets or sectors in the past few months?
We have added to Taiwan given the improving relations with China.
What are your favoured markets in Asia?
China because of its economic growth, and Taiwan because of its improving relations with China.
What markets are you bearish over?
India and Pakistan.
Many fund managers are very bullish on China, citing reasons that include its Rmb4 trillion stimulus package. Do you believe this hugely positive outlook on China shares is well-deserved?
Yes, although valuations for many of the stocks that are exposed to this stimulus like cement, steel, construction, etcetera have become stretched.
Could you please name three stocks that are among your top holdings and explain why you like them?
Vtech because of good management and track record, margins benefiting from cost improvements, and benefits from recovering housing markets. Shanda Interactive because of its strong growth in online gaming. Asia Cement China because of its exposure to China stimulus and earthquake rebuilding.