In its Quarterly Investment Manager’s Report ending 31 December 2014, Platinum Capital managing director Kerr Neilson said while options are available in the west, Asia has cheaper opportunities.
“The portfolio has been progressively tilting towards Asia,” Mr Neilson said. “We can still find shares to buy in the west, but within the reform-minded countries of Asia there are bargains.”
Mr Neilson also pointed out that while the US market had been the “leader of the pack” due to its earlier recovery, it may now “surrender leadership” to others.
“The two factors we will be watching are its tightening labour market and the suppressant effect emanating from a strong US dollar on Wall Street earnings,” Mr Neilson said.
“By contrast, China looks to be starting a new bull market fuelled by reform and easier monetary policy, while India could experience lower interest rates as inflation drops.”
Mr Neilson added that decreases in oil prices are a “resounding benefit” to consumers across the globe, especially for countries like India and most of Asia.
“Importantly, lower energy costs will impinge on the US Federal Reserve Bank’s tightening agenda and improve many emerging economies’ independence to follow monetary policies that better suit local needs,” Mr Neilson said.
“In other words, even if the US Federal Reserve does start tightening to ward off pressure emanating from, say, a tight labour market, the lower oil price will allow some Asian countries to cut rates,” he said.
