Book Review – Value Investing in Asia
All investors exhibit home country bias – and for Singaporean investors this can be stifling. Singapore is a small place with geographical constraints and investment opportunities can be limited.
Still, venturing out into the surrounding regions can be treacherous for those who are unaware of the dangers that lurk. Investors will have to face huge cultural and legal differences.
The biggest hurdles that the “games” that less than savoury operators play to defraud investors are different all around the world. One challenge I have had introducing investors to markets such a Hong Kong is a lack of resources to walk them through the market.
Tan Chin Hwee’s Asian Financial Statement Analysis: Detecting Financial Irregularities released in 2014 was a much needed release albeit on a much more advanced level focusing on the financial accounting.
Value Investing in Asia – co-authored by Stanley and Mun provide a much friendlier introduction suitable for beginners or intermediate investors.
They provide a robust framework to begin exploring Asia.
Chapter 3 – Uniquely Asia is one of the most important chapters of the book which covers the importance differences in cultures of doing business between Singapore and Asia ex Singapore.
More importantly, it features an in-depth discussion of something I see little talked about – corporate governance in Asia, the issue of dominant family majority shareholders and the thorny issue of succession.
Reading Chapter 7 – Finding Red Flags will also save investors a lot of potential pain and money. They cover many of the well-known warning signs and red flags that investors should pay attention to.
Investors need to be able to distinguish between companies that are temporarily cheap and permanently cheap and this book provides the building blocks to do so.
The books ends off with a series of case studies tying up the framework that they have developed – namely Hongkong Land Holdings, Tingyi, First Resources, Dalian Wanda and Tencent Holdings.
They also feature interviews with some relatively low key value fund managers such as Wong Kok Hoi of APS and and Yeo Seng Chong of Yeoman Capital Management which are probably my favourite part of the book.
The book will be most helpful for beginner-to-intermediate investors and feature a host of case studies that highlight succinctly the crucial differences in investing in the different jurisdictions.
It’s an easy read that will provide a solid understanding of select growth themes specific to the region, and also red flags to be wary of when investing in Asia.
You can get your copy here from the authors.
About the Authors:
STANLEY LIM PEIR SHENQ, CFA, has worked in the investment industry for many years. Most recently, he was an analyst for The Motley Fool Singapore. He has written close to 2,000 investment articles online. Stanley is currently the chief editor for ValueInvestAsia.com.
CHEONG MUN HONG, CFA, started his career as an investment analyst at a Singapore-licensed Trust Company. Over the course of his work, he has dealt with investments involving public and privately held entities. Mun Hong sits on the boards of listed companies.