23 November, 2009

Malaysia to re-emerging as an “Asian tiger” ?

ASIA’S tiger economies have suffered some of the sharpest declines in output during the global recession, and some fear that, because of their dependence on exports, they will not see a sustained recovery until demand rebounds in America and Europe.

Amid the shifting global dynamics that will see the development of new engines of growth and the gearing up for the next industrial revolution, Levitt Capital Management LLC (LCM) founder and chief investment officer Robert Levitt has been investing his clients’ money in emerging markets, including Malaysia.

LCM, which manages over US$400 million (RM1.36 billion) for clients globally, is based in Boca Raton, Florida, the United States. Levitt, who splits his time between the US and France, has been in Malaysia for the past three months to identify investment opportunities.

Though liquidity, or lack thereof, is an issue, Levitt is not wasting any time and in just two months, LCM has invested between US$10 million and US$15 million in stocks here, spending an average of US$1 million to US$2 million per stock.

“An investment theme that I’ve been looking at for several years is a group of countries that missed the industrial revolution, such as China and India, which are now catching up, and countries with large populations such as Nigeria, Pakistan and Indonesia, that don’t want to miss the next revolution.

“The fast growth of these countries with large populations adds an element of growth that is not really being considered by investment professionals in the United States and Europe. They are growing in affluence and income and are supported by governments trying to eliminate barriers to communication,” he said.

He sees Malaysia, though small population-wise, as among the countries “unwilling to miss the next industrial revolution”. He said Asian economies would be part of the world’s new engines of growth, in a market of increasing importance to investors.

“Malaysia will fit into that category and will become interesting again as one of Asia’s emerging tigers as it was in the 1990s, because it is opening itself to the world and especially if it is able to attract Chinese investments, which could be a huge boost to the economy,” Levitt said.

LCM also sees countries with growing affluence, emerging healthcare and aging populations in developed countries as an investment theme.

Levitt said the company looked at investment themes that would sustain for multiple years, in a world transitioning from exporting to the US and Europe for growth to increasing inter-regional trade, such as in Asia, which was growing quickly and where populations had increasing purchasing power.

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