By Claire Milhench
LONDON (Reuters) - Henderson is raising its investments in auto makers and energy companies in its TR Pacific Investment Trust, believing Asian consumer demand and economic growth will continue to rise.
"The growth of the consumer in Asia is a well-worn theme but there are still plenty of stocks out there that haven't been re-rated by the markets and offer interesting value," said Andrew Beal, manager of the trust, which has some 380 million pounds under management.
It was up 27.7 percent in the 12 months to the end of October according to Lipper data, but lagged its peers in the AIC Investment Trust Asia Pacific ex-Japan sector by 14 percentage points.
Asian markets have sold off in recent weeks, hurt by concern over Chinese monetary tightening to battle inflation, political scandals in India, and North Korea's attack on South Korea. Beal sees the correction as an opportunity to buy, rather than a sign that the market has peaked.
With greater numbers of consumers taking out loans to buy cars in China, Beal has added to his auto exposure with Dongfeng Motor (0489.HK). He cited its strong margins and a competitive new model line up.
Other key auto holdings include Korea's Hyundai Motor (005380.KS) and India's Maruti Suzuki (MRTI.BO), a joint venture with the Japanese car manufacturer, which sells low cost, reliable, fuel-efficient vehicles in India.
"Maruti has the best distribution in India and has continued to grow market share despite a lot of foreign rivals launching cars this year," Beal said.
On the energy side, Indonesian coal stock Adaro (ADRO.JK) is a recent addition, while existing holding China Coal Energy (601898.SS) has also been added. Both should benefit from a rise in demand, and supply disruptions to Australian coal mines.
In Thailand, he has recently added to oil and gas company PTT PTT.BK, citing the prospects for further growth in gas volumes as the economy rebounds. "I was there last month and for the first time in 10 years every single company I met was talking about expansion," said Beal.
His biggest theme this year has been Chinese travel and leisure spend, with key holdings including Sands China (1928.HK), the Macau offshoot of Las Vegas Sands (LVS.N), and Air China (601111.SS).
"Sands China is the first company in Macau with an integrated resort plan to pull in both leisure and gaming revenues," Beal said.
Other leisure holdings include Agile Property (3383.HK), which has a 10 kilometre strip on tourist-friendly Hainan Island, known as the Chinese Hawaii.
Another addition is Sina.com, which is full of the celebrity gossip that is not found in China's state-owned media. "They also have a mini-blog website, which is like the Chinese Twitter, and has 50 million subscribers," he said.
(Editing by Sinead Cruise and Louise Heavens) - reuters.com
