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FUND VIEW-More Asian companies to emerge as leaders-Pioneer

By Sabyasachi Mitra

HONG KONG, Aug 29 (Reuters) - Sergio Delle Cave, head of Asian equities at Pioneer Investments, says he's not a daredevil but is paid to manage risks with an eye on the future, one he reckons will have a strong Asian complexion.

Companies such as Samsung Electronics Co Ltd , Taiwan Semiconductor Manufacturing Co and many South Korean and Japanese automakers are all leaders in their respective sectors.

"We reckon this trend will keep going for Asian companies," said the Singapore-based fund manager, whose company manages about US$2 billion in Asia.

Delle Cave said Asian stock markets have gained significantly in the past four months, but valuations of regional stocks are still cheap compared with the rest of the world.

Pioneer, a unit of Italian bank Unicredito , is underweight on Australia, Malaysia and Philippines in the region outside of Japan.

"We are bigtime underweight in Australia. We think there are more opportunities other than Australia," the fund manager said.

Della Cave said Indonesia was a favourite market right now as it was reasonably valued despite the political problems dogging the Southeast Asian nation.

The fund manager liked PT Telkom Indonesia , which he said was a proxy for the nation's strong consumption sector.

"Indonesia is a favourite right now. It's a bit like Korea. There are lot of problems but the market is reasonably priced," he said.

In Korea, Della Cave liked the domestic financial companies, which he said are a "touch better" than during the 1997/98 regional financial crisis.

But he warned that going forward it could be a bumpy ride ahead for Korean financial stocks as the banks sort out their credit card delinquency issues.

The Italian-born fund manager also favoured the Indian market and counted the nation's largest petrochemical firm Reliance Industries Ltd and drug makers Ranbaxy Laboratories Ltd and Dr Reddy's Laboratories Ltd as among his top stock picks in the South Asian nation.

Della Cave said the recent rally in the H-share index , the benchmark for Chinese companies listed in Hong Kong, was pretty powerful but did not expect the same pace of performance going forward.

"We used to like energy and utility companies (in China). But now it's time to discriminate between companies rather than sectors. There can be room for some disappointment and so it's time now to focus on best quality companies like CNOOC Ltd " he said.

Pioneer expected a slowdown in macro drivers like high oil prices and the scorching pace of domestic investment to put a brake on the pace of growth of Chinese energy and utility firms.

Della Cave said he liked the Chinese auto companies Denway Motors and Brilliance China Automotive , despite market worries about oversupply.

He said the Chinese car market could experience exponential growth in local demand.

The fund manager said Hong Kong conglomerate Hutchison Whampoa Ltd , which is facing heavy investment costs for its third generation mobile phone operations in the United Kingdom and Italy, could also surprise investors on the upside.