Nikko AM’s Sartori: Best Buying Opportunities in Asia in My Career (AFR)

Peter Sartori, head of Asian equity at Nikko Asset Management, was quoted by the Australian Financial Review as saying:

“This is one of the best buying opportunities in Asia I have seen in my career. In over 20 years of investing in the region, I cannot recall investor sentiment this low. History shows these extreme situations in Asia are usually followed by a period of strong returns.”

However, Sartori’s view on Asia excludes China A shares and includes Chinese companies listed in Hong Kong. He later noted:

“The price-to-book ratio in Asia has only got to this level four times [1997 Asian financial crisis, the dotcom bust in 2000, the 2002 severe acute respiratory syndrome (SARS) outbreak and the 2008-09 global financial crisis]. We really are at rock bottom prices in Asia. The region clearly has challenges, but we see no reason why things will morph into a more severe crisis, or why Asian equities should trade below GFC levels.”

Sartori also believes sharply lower energy prices will boost Asian economies and that greater clarity from China about its currency and the strength of its economy could spark a rally:

“For whatever reason, Asian markets are getting no benefit from investors for lower oil and commodity prices. India, in particular, is a big winner from lower energy costs, but the market keeps punishing Asia every time commodity prices fall… For some time, we have expected Chinese growth to slow to between 4 and 6 per cent. What we didn’t expect was the Chinese government’s fumbled attempts to manage its currency and communicate with markets. China will get better at this, and the market will eventually give Chinese stocks more recognition that the transition to a consumption-led economy is playing out.”

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