Aberdeen likes emerging Asia

By Ploy Chitsomboon

BANGKOK (Reuters) - Aberdeen Asset Management said on Tuesday it was taking a positive view on emerging Asia equities including Thailand but it was wary about the "green shoots" sprouting up in the global economy.

Risk appetite in emerging market equities had returned, with lower volatility, and China was likely to lead the market rally due to optimism over its massive stimulus and cyclical upturn, according to Christopher Wong, Aberdeen's investment manager for Asian Equities.

"Global emerging Asian markets have seen such a strong $40 billion (24 billion pound) inflow versus $10 billion of outflows in the developed world since March," the Singapore-based fund manager told a media briefing in Bangkok.

"The worst is probably over but it will take time before we see some real fundamental recovery. Earnings growth has to pick up. Hopefully, that will happen in 2010," Wong said.

He said U.S. investors were trying to diversify away from their holdings in the developed world and Thailand looked good from a valuation standpoint. "We've actually taken a strong overweight position out here."

The Thai stock market .SETI offers relatively cheap valuations at an estimated P/E ratio of 11.6, a 1.38 price-per-book value and high dividend yield of 4.6 percent, according to Reuters data.

Thailand's benchmark index has gained roughly 33 percent this year, outperforming the 29 percent rise in the MSCI index for Asia Pacific .MIAPJ0000PUS shares outside Japan.

In Asia in general, information technology, energy and raw material stocks would probably lead a new rally as investors shifted out of defensive stocks like consumer staples, Wong said.

"The worst is probably over, fuelled by governments' economic stimulus packages ... which have outweighed the threat of swine flu," he said.

Thailand was an example of a country that could spring a positive surprise as investors played catch-up on stimulus measures, Wong said.

Thailand's lower house of parliament on Tuesday approved the first of two major fiscal bills authorising the government to borrow 800 billion baht to finance stimulus spending and fiscal deficits.

Adithep Vanabriksha, deputy chief investment officer of Aberdeen's Thai unit, said there had been no change in its holdings in 30 Thai stocks as it focused on companies with high dividends.

Its Thai portfolio included energy firm PTT Exploration and Production PTTE.BK, industrial conglomerate Siam Cement SCC.BK, Kasikornbank KBAN.BK, Siam Commercial Bank SCB.BK and mobile phone provider Advanced Info Service ADVA.BK.

Hypermarket operators Big C BIGC.BK and Siam Makro MAKR.BK, utilities EGCO EGCO.BK and Ratchaburi Holding RATC.BK and Hana Microelectronics HANA.BK were also among its top holdings.

(Editing by Alan Raybould)