ZURICH, Jan 28: Driven by efforts to find what could prove to be a bargain down the road, Swiss fund managers are putting out cautious feelers to find investment opportunities in troubled Asia.Geneva-based private investment firm Pacific Securities, for example, is looking towards China."We are concentrating mainly on China," said Jean-Pierre Ziegler, managing director.He said China's "B" shares, which currently have a price/earnings ratio of only about 12 and are denominated in hard currencies, may provide an opportunity.
The low P/E on foreign currency "B" shares, considered an investment for foreigners, compares with a P/E of about 30 on domestic currency "A" shares sold to domestic investors.Ziegler believes Chinese citizens looking to invest large holdings of hard currency are buying "B" shares by finding ways around official restrictions on them holding stock supposed to be limited to foreigners. That should boost the shares relative to "A".
He also sees a chance that the distinction between "A"and "B" could be done away with in a few years which could be positive for the "B" shares.He was upbeat on the Philippines as well as Singapore and Malaysia over the medium-term.Efforts in the region are selective, and admittedly leave out some popular choices of years past, including Thailand, where the central bank chose last July to stop defending its currency, precipitating a liquidity crisis.
"For around two or three years we hadn't been investing in Thailand, or in Indonesia,"said Ziegler.Outside of Switzerland, Paul O'Donnell, managing director of BT Funds Management in London, said investors would watch for signs of economic stability, including liability management in the form of International Monetary Fund support, and political developments. But he saw no run for the exits among investors following the latest upsets in Korea and Indonesia.
"I think if people were getting nervous they got nervous three months ago. What we are detecting now is (that they are) wondering when it is time to get backin again," O'Donnell said.In South Korea alone, the IMF has led a rescue package of nearly $60 billion. Its private creditor banks also have agreed to a temporary rollover of South Korean short-term debt.Indonesia already agreed to a $43-billion IMF package in October.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
