Speaking at the Morningstar UK Investment Conference in London, Jonathan Asante, Joint Deputy Head of Global Emerging Markets at First State Investments, explained what he looks for when seeking investment opportunities in emerging markets and which GEMs he's particularly interested in at the moment. His video interview and full transcript are published below. For more coverage of Asante's presentation, as well as presentations from a broad range of investment luminaries at the Morningstar Investment Conference, read my blogs from Day 1 and Day 2.
Holly Cook: We're here at the Morningstar Investment Conference and joining me today is Jonathan Asante, he's joint deputy head of global emerging markets at First State Investments. Jonathan, thanks for joining me.
Jonathan Asante: Thanks.
Cook: So you've just given us a presentation on...
Asante: Yeah.
Cook:...talking us through investing in GEM. Can you summarise some of your key points for us please.
Asante: Yes. I guess the first key point was that there's a growth opportunity which has been provided to us in the emerging markets by the terrible policy of the dictators and the lunatics that were running them in the 20th century. And that opportunity still exists, although there is some policy slippage based on what's going on in the world--fiscal policies getting a bit out of control in some places. The way that we choose to invest our own money--because we invest our own money alongside clients'--is we look for people we can trust, and we look at their history and their track record, we look for businesses that are stable, and we don't overpay. So that was really the message that I was trying to get across with some anecdotes about the sort of companies that we meet.
Cook: And you mentioned during the presentation that you thought BRICs were particularly expensive at the moment, are there any areas--geographical or otherwise--that you're particularly excited about at the moment?
Asante: Yeah, I mean, the difference with the '06/'07 time is that there are areas that aren't as expensive. There are some very good companies with long track records, post-apartheid track records in South Africa, that are reasonably priced. Korea, Taiwan both have very good companies with reasonable yields--5%, 6%. Taiwan I think is the only emerging market that's down over the last 10 years, because it's been awful Taiwan, so that's a place where you might find good companies that are quite cheap. And outside of BRIC there are always companies. The other thing is there are other sorts of companies, for example a company like Western Union, which is a money transfer company listed in America, but all its activity--all of it--is based on spending small amounts of money from the developing to the developed world and vice versa, and that's on a P/E of 11 or 12 so that's reasonably priced and it's a good brand. So there are still opportunities in emerging markets--it's not like it was in the back end of '07.
Cook: Well thank you very much for taking the time to join us.
Asante: Thank you.
Cook: For Morningstar, I'm Holly Cook. Thanks for watching.
