Hunting for bargains in Asia's emerging markets
Chicago-based Ariel Investments, which manages US$15 billion, says equity valuations in markets like the Philippines and Vietnam are the lowest they've been in 30 years.
Henry Mallari-D’Auria is the Chief Investment Officer of Global and Emerging Markets Equities at Ariel Investments, a Chicago fund manager with around USD15 billion ($23 billion) in assets under management. Mallari-D’Auria joined the firm in May after 20 years at AllianceBernstein.
What opportunity are you seeing in emerging markets?
Right now you can buy profitable fast-growing companies at one of the lowest valuations I’ve seen in my 30 year career. In aggregate, we are finding stocks that are selling at single digit P/E ratios with good profitability and good balance sheets. It is very difficult to find anything similar to that in developed markets.
Compare that to the US which is running an 8% fiscal deficit before a recession and before we start paying 300-400 basis points more on our debt. Yet despite those uncertainties, US equities sell at nearly twice the valuation of emerging equities.
Emerging markets have been cheap before but they don't always perform. What gives you confidence this time around?
