Asian stocks lose some shine for Scotland’s fund managers
Aberdeen, Standard Life cut their holdings citing valuations, earnings
Bloomberg 04 November 2009
(EDINBURGH) Scotland’s two biggest fund managers say it’s getting tougher to make money from Asian stocks.
Aberdeen Asset Management has been reducing its holdings because of their valuations compared with other parts of the world, said Mike Turner, head of strategy.
Ronnie Petrie, head of Asian stocks at Standard Life Investments, said: ‘It’s harder to find pockets of value.’
‘We have taken our foot off the accelerator, but we are a long way away from putting our foot on the brake,’ Mr. Turner, whose company managed £129 billion (S$295 billion) on June 30, said in an interview. ‘It’s ripe for a little consolidation in Asian markets.’
The MSCI Asia Pacific Index, which has soared 63 per cent since hitting the lowest in more than five years on March 9, on Monday extended its first monthly drop since February.
Mr. Petrie said in an interview on Monday: ‘It’s difficult to be massively enthusiastic from here.’ Standard Life oversaw £136.9 billion as of Sept 30.
Companies in the MSCI Asia Pacific Index trade for 15.8 times estimated 2010 earnings, compared with 13.4 for the MSCI World Index of developed markets, 12.2 for the MSCI Emerging Markets Index and 13.5 for the Standard & Poor’s 500 Index, the benchmark measure of US stocks.
Mr. Turner said he’s concerned that fewer companies in Asia are beating analysts’ earnings estimates. Less than 53 per cent in the MSCI Asia Pacific Index have topped the average projection since Oct 7, trailing the 84 per cent for S&P 500 companies, according to data compiled by Bloomberg. Beijing-based PetroChina Co, the world’s second most-valuable company, missed forecasts last week.
‘There is no longer a great element of surprise in earnings,’ Mr. Turner said. Aberdeen oversees £13.7 billion of Asian stocks. ‘It’s time to take a little bit of money off the table.’
Standard Life is selling Nintendo, which fell the most in three months on Oct 30 after it lowered its annual profit forecast because of slumping sales of Wii game consoles.
Mr. Petrie, 43, said the company’s ‘thesis on Nintendo was wrong’. The stock is down 13 per cent in the past six months. He also sold PT Bumi Resources, Indonesia’s biggest coal company.
Over the past year, Standard Life’s investments in Asian stocks outside Japan returned 66 per cent for pension clients, ranking 37 of 138 similar plans, according to data from Morningstar Inc.
Mr. Petrie has bought Globe Telecom, the second-largest provider of mobile phone service in the Philippines. He also invested in China HealthCare Holdings and Shandong Weigao Group Medical Polymer Co, a maker of medical devices, betting that China will spend more on healthcare as the economy expands.
Chinese manufacturing data for October on Monday showed the recovery strengthening and export orders growing. Hong Kong’s Hang Seng Index is up 50 per cent this year.
Mr. Turner said the risk now is that central banks in Asia act more quickly than their counterparts in the US and western Europe to respond to the economic recovery.
‘There is acknowledgement that monetary policy will change in Asia and other emerging markets before it does in the developed world, that the stimulus will be taken off the table sooner,’ Mr. Turner said.
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Asian stocks lose some shine for Scotland’s fund managers
Aberdeen, Standard Life cut their holdings citing valuations, earnings
Bloomberg
04 November 2009
(EDINBURGH) Scotland’s two biggest fund managers say it’s getting tougher to make money from Asian stocks.
Aberdeen Asset Management has been reducing its holdings because of their valuations compared with other parts of the world, said Mike Turner, head of strategy.
Ronnie Petrie, head of Asian stocks at Standard Life Investments, said: ‘It’s harder to find pockets of value.’
‘We have taken our foot off the accelerator, but we are a long way away from putting our foot on the brake,’ Mr. Turner, whose company managed £129 billion (S$295 billion) on June 30, said in an interview. ‘It’s ripe for a little consolidation in Asian markets.’
The MSCI Asia Pacific Index, which has soared 63 per cent since hitting the lowest in more than five years on March 9, on Monday extended its first monthly drop since February.
Mr. Petrie said in an interview on Monday: ‘It’s difficult to be massively enthusiastic from here.’ Standard Life oversaw £136.9 billion as of Sept 30.
Companies in the MSCI Asia Pacific Index trade for 15.8 times estimated 2010 earnings, compared with 13.4 for the MSCI World Index of developed markets, 12.2 for the MSCI Emerging Markets Index and 13.5 for the Standard & Poor’s 500 Index, the benchmark measure of US stocks.
Mr. Turner said he’s concerned that fewer companies in Asia are beating analysts’ earnings estimates. Less than 53 per cent in the MSCI Asia Pacific Index have topped the average projection since Oct 7, trailing the 84 per cent for S&P 500 companies, according to data compiled by Bloomberg. Beijing-based PetroChina Co, the world’s second most-valuable company, missed forecasts last week.
‘There is no longer a great element of surprise in earnings,’ Mr. Turner said. Aberdeen oversees £13.7 billion of Asian stocks. ‘It’s time to take a little bit of money off the table.’
Standard Life is selling Nintendo, which fell the most in three months on Oct 30 after it lowered its annual profit forecast because of slumping sales of Wii game consoles.
Mr. Petrie, 43, said the company’s ‘thesis on Nintendo was wrong’. The stock is down 13 per cent in the past six months. He also sold PT Bumi Resources, Indonesia’s biggest coal company.
Over the past year, Standard Life’s investments in Asian stocks outside Japan returned 66 per cent for pension clients, ranking 37 of 138 similar plans, according to data from Morningstar Inc.
Mr. Petrie has bought Globe Telecom, the second-largest provider of mobile phone service in the Philippines. He also invested in China HealthCare Holdings and Shandong Weigao Group Medical Polymer Co, a maker of medical devices, betting that China will spend more on healthcare as the economy expands.
Chinese manufacturing data for October on Monday showed the recovery strengthening and export orders growing. Hong Kong’s Hang Seng Index is up 50 per cent this year.
Mr. Turner said the risk now is that central banks in Asia act more quickly than their counterparts in the US and western Europe to respond to the economic recovery.
‘There is acknowledgement that monetary policy will change in Asia and other emerging markets before it does in the developed world, that the stimulus will be taken off the table sooner,’ Mr. Turner said.
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