Franklin Templeton has raised exposure to Thai and Indonesian equities, foreseeing that domestic consumption will continue to increase and Bangkok and Jakarta's stock exchanges will perform very well over the next five years.
Dennis Lim, Singapore-based portfolio manager of Franklin Templeton's emerging markets group, said Thai and Indonesian shares in Templeton's $16 billion Asian Growth Fund had recently been increased while it remained 'overweight' on the two markets.
"We will continue to overweight both Thailand and Indonesia. There is still room ... because if you look at the earnings growth of Thailand and Indonesia, we expect the next five years will be quite strong so we continue to like them," he said.
The fund considered the debt crisis in Europe as one of the key risks to the global economy while large populations of the ASEAN and growing demand of its key trading partner China boded well for growth in the emerging region, he said.
"It's a very good region to be in right now ... we look at Asean as a region of a 600 million people and income level is rising. So, domestic demand in all these markets will continue to increase," he said.
"Vietnam is starting to turnaround ... The investment environment in Cambodia is getting more conducive ... For Myanmar, we like what we see. We like the changes," he said.
"At the moment, our exposure in Myanmar is very small. Our exposure in Myanmar is through Thailand. We're holding in companies like PTT Pcl as we're looking at Myanmar. We would like to get more direct exposures," he said.
1015 (0315 GMT)
(Reporting by Viparat Jantraprap in Bangkok; firstname.lastname@example.org)