Kuala Lumpur, April 17 - Malaysia's Singular Asset Management is buying more Chinese stocks such as snacks maker Want Want, juice maker Huiyuan and instant noodle maker Tingyi as it is upbeat about China's medium- to long-term outlook.
Teoh Kok Lin, managing director of Singular, which manages about $100 million from Malaysia, believes Chinese stock markets have bottomed out after nearly halving in sell-offs late last year.
While Asian exporters will be badly hit by the global downturn as consumers in the United States and Europe slash spending, companies operating in countries with high levels of domestic consumption, such as China and Indonesia, would remain resilient, said Teoh.
Teoh said he is particularly positive about China and Indonesia also because of their business friendly government policies.
The fund manager likes companies such as Want Want , Huiyuan and Tingyi because they are the dominant players in their respective products.
"I believe that for many good companies in China, given that share prices are so low now, it's easy to double or even triple the returns from these stocks over a 3-5 year horizon," said Teoh, who worked as a sell-side analyst in Malaysia and Singapore for 12 years before setting up Singular in 2002.
Singular has produced a compounded annual return of about 11 percent for the past five years, compared to the benchmark index's 2 percent gain.
On the Malaysian stock market, Teoh said he is investing more in companies likely to benefit from a recovery in China, such as palm oil firms and department store operator Parkson , which has a strong presence in the mid- to high-end retail market in China.
"We are also looking at companies that will benefit from the government's pump-priming, such as the construction and building material sectors," he said.
The Malaysian government last month announced a near-$17 billion stimulus package to help the economy as the country heads for its worst slowdown in more than a decade.
Teoh said his firm is also scouring for deep-value stocks -- stocks that have fallen below their intrinsic value.
"IGB is one. It's cheap by almost all measures and despite worries about the recession, the company's business is still good. It's retail malls continue to draw big crowds," he said.
IGB owns the Mid Valley Megamall, Malaysia's largest shopping centre, and runs hotels in Malaysia, Myanmar, the Philippines and Vietnam.
Based on Thursday's close, IGB has gained 28 percent over the last six months, outperforming the wider market's 4.5 percent rise. (Editing by Ian Geoghegan) ($1=3.597 Malaysian Ringgit