2009年 04月 27日 16:32
Investor gloom that surrounds Europe at the moment is almost matched by the enthusiasm for emerging Asia stock markets.
Much of that is down to economic growth — poor here, better there. Goldman Sachs last week raised its China growth forecasts to 8.9% for 2009 and 10.9% in 2010. The 27-nation European Union, however, is likely to contract 4% this year, the International Monetary Fund predicted.
The diverging growth makes the hard-to-argue case for investing in Europe even harder. Indeed, although the pan-European Dow Jones Stoxx 600 Index is up 11% so far this month, putting it on track for its best monthly gain since at least 1992. the gains are less than those in India, South Korea and Hong Kong, with its heavy exposure to China.
But some money managers say valuations in Europe are compelling and that many European companies can give investors exposure to the Asian growth story. While Asian markets have been sizzling, any swings down also tend to be sharper than those in Europe, and much of China’s stock markets are off-limits to western investors.
‘Emerging Asia in particular has dramatically outperformed this year. It’s unclear why you would want to wade into Asia and not buy Europe,’ said Richard Cookson, London-based head of asset allocation research at HSBC.
‘Structurally, it may be true that Asia has better growth prospects over time. The question is whether the growth prospects are as good over the next 12 to 24 months,’ he said. ‘Take China out of the equation for a second and it’s clear that Asia is very exposed to global trade, and global trade is cratering.’
Global economic prospects mean Mr. Cookson is also underweight developed-market stocks, including Europe, and prefers Latin America, South African and Russia stocks as well as corporate credit.
European shares trade on nine times expected earnings, while Asia is a pricier 11 times 12-month forward earnings, said Kevin Hebner, global investment strategist at Third Wave Global Investors in Greenwich, Conn.
While portfolios should overweight emerging Asian markets relative to their benchmark, this may not be the time to make a big regional bet, he said.
‘The chance that Europe plays catch-up is real, especially since the biggest concern about the west versus the east was the condition of the banks, and we’re starting to get some good news (selectively) about banks for the first time in many moons,’ he added in an email.
Goldman Sachs recently began to moderate its yearlong defensive stance on European stocks. But its ‘conviction buy list,’ or favorite recommendations, is peppered with stocks that have significant sales in China.
They include wind-turbine makers Spain’s Gamesa SA and Copenhagen-based Vestas Wind Systems AS, Finnish handset giant Nokia Corp. and Dutch semiconductor-equipment maker ASM International NV.
Such stocks have delivered; analysts at ING say the 25 stocks in the Stoxx 600 with the highest reported sales exposure to Asia jumped 35% since February, recovering nearly all of their underperformance since May 2008. Stocks include metals giant BHP Billiton PLC, chip plays ASML Holding NV and Infineon AG, luxury jewler Cie. Financiere Richemont SA and consumer giant Unilever NV.
Those who can invest directly in Asia may prefer to do so, said Gareth Williams, London-based ING analyst. But ‘many of Europe’s largest companies are effectively global companies. Even if Europe’s economies remain weak, these stocks offer a means of gaining exposure to other, faster-growing regions without having to take on the research burden and currency risk of investing globally,’ he said
But some say it’s still no contest and that emerging Asia is the way for investors to go.
‘China, which has been responsible for a large chunk of global growth for some years, is now recovering and will, with India, pull the entire region along,’ said Giles Conway-Gordon and Christopher Wolf, joint chief investment officers at Cogo Wolf Asset Management in San Francisco.
Europe’s economy, on the other hand, will simply continue to struggle, with unemployment only expected to worsen, governments waist-high in debt and the region still suffering from economic uncompetitiveness.’
‘Overall, we are still cautious about, and underweight on, all equities but are looking to re-enter Asia (i.e. Emerging Asia), plus India and will continue to avoid Europe,’ they said.