Samir Mehta

Senior Fund Manager, JOHCM

South Korea and Malaysia in focus

Histrionics – of or belonging to stage players or to play-acting; theatrical; dramatic.

This month during summer break I spent some time on the East Coast of the US. It was surreal listening to family and friends separated by a chasm on their political views. But it was also amusing to be part of the conversation fed by the daily drama emerging from the White House. More so as for the first time Americans wanted to know what Asia in general thought about President Trump and his administration. Fortunately, we’ve had our fair share of colourful leaders in Asia. Over the years, experience has inured us to recognise that political developments can make a difference to broad market movements. What is of more relevance, though, is the trend of the US dollar, which still remains the reserve currency. Look no further than the South Korean market this year. A belligerent North Korea, an impeached and deposed President, management of its largest conglomerate, Samsung Electronics, accused of involvement in money politics, and China threatening retaliation for siding with the US, who would have expected South Korea to be amongst the best-performing markets in the region over the year to date?

Korean stocks boom as the US dollar swoons










More in Malaysia

Our exposure to Malaysian stocks has risen to 5%, from a zero weighting at the start of the year. Generally speaking, analysts and commentators alike rarely have much to say that is complimentary on the way the Malaysian economy is managed. I, too, am sympathetic to that viewpoint. However, when deterioration in economic conditions has been reflected in market prices, both in equities and the currency, it does make sense, in my view, to take a positive view. There is no other justification except to say that a lot of the negativity is in the price, and I don’t think we will lose too much on our Malaysian investments. But the probability that things can go right is, I believe, high and time will tell how well that scenario develops.

Malaysian bank CIMB Group looks cheap on a price-to-book value basis














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