Newton’s Pidcock: Asian Recovery Just Getting Started (FE Trustnet)

Newton’s Pidcock, the manager of the Newton Asian Income fund, recently explained to FE Trustnet why the rebound in the emerging market sector should continue to gather momentum as markets simply were too cheap by early February. He also talked about what could derail things:

“If the oil price really spiked that would have a knee-jerk reaction and equities would fall in response, but probably that would be a buying opportunity. At the moment, the news flow hasn’t been bad enough to cause the oil price to go crazy. It has moved up meaningfully but not terribly. If it went, let’s say up to $130 a barrel or higher, I think equity markets would react negatively.”

And:

“If the property market in China deteriorates even faster than people are expecting, that could hold things back. There has been a deterioration that has affected a number of commodity prices, a number of share prices, even the Chinese currency itself. We’re not expecting the whole place to unravel, but we do think again there needs to be a rebalancing in China, as in other countries. Property investment, property development, is unlikely to be a driver of growth going forward.”

Pidcock also explained in the interview why he continues to believe in the Macau casino gaming sector:

“It remains a very closed market. There are six licensed operators in Macau. There are very high barriers to entry. New supply coming on will grow profitability. In the case of Wynn Macau it’s 2016 where we expect a big pickup in profits due to increased capacity.”

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To read the whole interview transcript, Asian recovery just getting started, says Newton’s Pidcock, go to the website of FE Trustnet.

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