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Invest in Emerging Asia
‘Invest in the Asian future’
Latin AmericaMarch 2006
Wim-Hein Pals
Emerging Asia will win in the end
Emerging Asia is going to play catch up
Trends
New trends in emerging AsiaConsumer: growing middle class with strong purchasing powerFinancials: less debt, rational capex investing, shareholders’ interest are respected
Technology: from followers to leaders
Structural trendsInfrastructure and transport (electricity, roads, telephony)CommoditiesChina as the world’s production centre & India as the world’s services centre
Change in leading emerging marke t parameters end 1994 - 2005Area 1994 2005 2005 vs 1994Tota l Govt. Debt % GDP 36% 44% 8%Externa l Debt% GDP 32% 28% -5%EMBI+ Sovere ign ra ting BB- BB+ 2 pointsInfla tion 19% 4% -15%Fisca l Balance % GDP -3.0% -1.2% 2%Current account ba lance % GDP -0.9% 2.5% 3%Net Exte rna l Financing Requirement % GDP 2% 1% -1%GDP, annual % change 5.5% 6.1% 1%Exports % GDP 20% 32% 12%Average 3 month vola tility 8% 11% 3%
Stocks – consumer name
Affordable high quality consumer electronics
Growing market share in the world
Very well managed
One of the world’s top players in mobiles (top 3)
World leader in memory chips
World leader in TFT-LCDs (flat panels and televisions)
Stocks – Chinese food name
Trend: efficient production
Well managed
Economies of scale
High growth potential
Government supports rural areas
Stocks – Chinese share of global materials demand
Stocks – China main driver behind materials exposure
Largest iron ore producer in the world
Lowest costs of mining & transportation
Strong demand for iron ore from ‘Chindia’
High quality management, high quality reserves
Stocks – automobile name
Penetration strategy very succesful
Quality is now superior: see text
Valuation still extremely cheap
New world brand / Toyota’s nightmare
Financial Times, 7 March 2005
Stocks – technology name
Outsourcing trend
Much cheaper: only 20% of the costs in the West
Top quality
No debt on balance sheet
Annual growth of 40% plus
Why now?
High growth expectations
Good earnings outlook
Low valuation still
Why Robeco Emerging Markets?
Robeco Emerging Markets puts the money in structural high economic growth in Asia
Regional breakdownEmerging Asia 57%Emerging Latin America 19%Emerging Europe/Africa 24%
Six largest countriesChina & Taiwan 24%Korea 22%Brazil 15%South Africa 10%Russia 9%India 8%
Emerging LatinAmerica
19%
Emerging Europe/Africa
24%
Emerging Asia57%
Why Robeco Emerging Markets?
Robeco has 75 year experience in emerging markets (first investments in Chile and Peru in 1930)
Very experienced team of six professionals
Strong performance track record
To conclude
Powerful companies in powerful countries
Attractive valuation
In short: more growth for fewer pesos!
Robeco Emerging Markets Equities