Picking stocks with Asean-wide businesses

SINGAPORE (Jan 27): Companies with core businesses spread throughout the Asean region outperformed the Straits Times Index in 2016. If the trend continues, Daiwa Capital Markets recommends investors consider looking into Thai Beverage and Jardine Cycle and Carriage as they offer exposure into the Thai and Indonesian markets respectively.

75% of Jardine C&C’s earnings come from Astra International and Daiwa’s alliance partner Bahana Securities has an “overweight” rating on the Indonesian automotive sector, and a “buy” rating on Astra. Bahana’s analyst Leonardo Henry Gavaza noted that Astra has a strong macro outlook which would continue to support the demand for big-ticket items, driven by low interest rates and higher government spending from the tax amnesty.

For the first 11 months of 2016, Indonesia’s automotive 4-wheeler sales had risen by 4% to 975,000 units, while 2-wheeler sales fell 85 to 5.5 million units.

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