2012 Investment ProspectBrilliant Strategies by Experts

Fan Cheuk Wan, Managing Director and Head of Research Asia Pacific of Private Banking Division at Credit Suisse, proposed six investment strategies with regard to investing in the Asian market this year when she was talking about her investment outlook for 2012. Firstly, she suggested investors picking stocks with high dividend as these stocks mostly belong to the category of investment tools with robust liquidity, sound assets and liabilities situation as reflected in balance sheet and high transparency in terms of profits. BOC HONG KONG (2388) is the top pick amid the low and zero interest rate global environment, which is likely to sustain for a long period of time. BOC HONG KONG, a stock backed up by the concept of yuan reforms, has a dividend yield reaching 6.32% for the year 2012. She also recommended ICBC (1398) and CCB (0939); the former has a 2012 dividend yield of 6.5% while the latter has a yield of 4.94%. Secondly, she advised to choose cyclic stocks which are benefited by policy easing, see excessive selling and have relatively low valuations. CHINA SHENHUA (1088) is her top pick in resources sector while PETROCHINA (0857) and SINOPEC CORP (0386) are her preferences among oil stocks. These three are less likely to be affected by global economic cycle, according to Fan.

Thirdly, Fan recommended Asian stocks driven by domestic demand to investors, who may selectively absorb stocks with stronger fundamentals like GOLDEN EAGLE (3308), LENOVO GROUP (0992), TING YI (0322) and CHINA UNICOM (0762). Fourthly, she said there is still heated steam to spur the appreciation of yuan and other Asian currencies despite a continuous volatility in these currencies within sight that may last for a short while. There will still be room for yuan to appreciate 3-5% this year, she indicated. Yuan and other Asian currencies like the Singapore dollar, won and rupiah have certain investment value. Fifthly, she proposed the selective absorption of Asian bonds with reference to defensive investment strategy, especially Asian corporate bonds issued by state-owned enterprises. This type of corporate bonds would have smaller price volatility and bear less risk. CHINA RES POWER (0836) would be a good choice, according to Fan. Sixthly, she advised investors to pay attention to gold. Gold price slumped recently as the exchange rate of the greenback rebounded by a large extent. Nevertheless, gold is estimated to reach US$1,750 within a quarter and to stand at US$1,900 in a year’s time. The global market is meeting with a low interest rate environment at the moment, which is a major upside factor for gold price.

William Fong, Investment Manager of Baring Asset Management (Asia), said the fund purchased finance and resources stocks with bigger market values in mid-2011 when the market became volatile. These stocks include ABC (1288), CHINA LIFE (2628), CNOOC (0883) and PETROCHINA (0857). As to technology sector, he held a most bullish outlook over COMB (2342), which is benefited by the 3G and 4G telecommunications development in Mainland China, followed by Baidu and Tencent. Earlier absorption of CNOOC and PETROCHINA (0857) brought satisfactory profits to Fong as oil price advanced to nearly US$100/barrel from over US$80/barrel. Ricky Tam, Chairman of the Hong Kong Institute of Investors, indicated that Hong Kong stocks have risen above 100 MA and may go up to touch the high position of 22,000. Tam frankly said, as a fund manager, he recommended non-finance stocks to investor. He entertained a positive view on PETROCHINA (0857) and SINOPEC CORP (0386), the two giants of oil and petrochemical industry. He also favored stocks attached with concept of newly born babies in the Year of Dragon, namely, GOODBABY INTL (1086), PRINCE FROG (1259), BOSHIWA INT’L (1698), LERADO GROUP (1225) and AUSNUTRIA. Christpher Probyn, Chief Economist and Managing Director of State Street Global Advisors, was not having too much worries over the European debt crisis. His main concern lies in whether the European Union could successfully proceed with the Bond Exchange Program. The sovereign debt crisis will definitely deteriorate sharply if the program fails to be materialized. The global stock market will dive and perform very badly as a result, Probyn said. Probyn expected the US to record an economic growth of over 2% and therefore there will be no room for putting out QE3. The US will only launch QE3 in a substantial scale if the economic growth is below 2%, Probyn believed.