Emerging Markets Stock Writeups

Shaw Bros. 33% owned by the 99-year-old Sir Run Run Shaw - who has vowed to retire at 100 - and is in turn one-third owner of Hong Kong's dominant terrestial TV station, HK TVB. Shaw has been 'The Man' in the local 'action flick' market for 70 years, from Kung Fu to some truly dreadful operas. The shares trade at a discount just to its holding in TVB, let alone the large movie library, theatres and studio values. Cash flow-strong, and with low debt, why the company has never had a larger footprint in China is an enigma - it probably dates back to now ancient political loyalties and feuds; it is now only a question of time. Real growth across the border beckons.

Sedol	Type	Price	Date
6801058	Buy	HKD 15.00	17/10/2007

A mid-tier domestic bank focussed on the local consumer loan market. It was bailed out by the Government at the turn of the century and since restructured, with the State owning half. With its historic bad debts all written off by the Treasury and tight controls over its lending, it proved a rare case of being wholly unexposed to the global sub-prime fiascos. After the stock price ran up, it was subsequently cut.

Siam City Bank was merged with Bangkok Metropolitan Bank and nationalised, with all non-performing loans removed from the balance sheet by the government, which still retains a 48% stake. The bank is trading close to book value, and investors are rewarded by a 6% dividend yield. The Thai economy has been on ice, due to the lack of resolution of the political situation. Any pick-up in lending will lead to a re-rating.

Sedol	Type	Price	Date
6363202	Sell	THB 17.27	08/04/2008
6363202	Buy	THB 18.211	01/03/2007
6363202	Buy	THB 18.65	30/06/2006

Siam Makro. 50%+ owned by Makro of Holland, the company operates several supermarkets within greater Bangkok and, increasingly, across Thailand. Domestic consumption is likely to grow rapidly in 2008 and either the currency appreciates - it is straining upwards already - or interest rates are cut; either way, Makro should see accelerating revenue growth. In the meantime it carries a desirable 6% yield. Good management and no shareholder skimming distinguish it from many local operations.

Sedol	Type	Price	Date
6798796	Buy	THB 97.85	27/09/2007

The company has been a prime beneficiary of the deregulation and expansion of Asian airports, together with the growth in low-cost carriers. Unfortunately (or fortunately for fund-holders) the stock price has more than caught up with growth expectations. As we saw no reason to revise up earnings and our target price, we sold our holdings, locking in a healthy profit.

SATS is 85% owned by Singapore Airlines, and operates in an environment with limited competition. Traffic growth is driven by a rapid increase in Low Cost Carriers (LCCs) which in Singapore have no alternative but to operate from Changi airport and therefore represent a captive market. Further growth is provided by SATS' 13 regional JVs. SATS has a net cash balance sheet and dividend tax credits to utilise before the end of 2007, allowing a yield of 5.3%. We see 35% upside to the stock, and the long-awaited sale by the parent company is a likely catalyst for re-rating.

Sedol	Type	Price	Date
6243586	Sell	SGD 3.451	24/04/2007
6243586	Buy	SGD 2.263	25/05/2006
6243586	Buy	SGD 2.308	23/05/2006
6243586	Buy	SGD 2.40	03/03/2006
6243586	Buy	SGD 2.253	21/07/2005

Shares in SinoPac, the Taiwanese bank, were purchased, as it looks set to grow its income in three ways. Formed from a merger of two banks, Sino Pac has the scope to cut costs and clean up its loan book, thus cutting provisioning expenses. It is also expanding its wealth management business, a growth area in an under-developed industry. Even without factoring in the likely growth, SinoPac is inexpensive on most measures.

Sedol	Type	Price	Date
6525875	Buy	TWD 15.427	07/03/2007

SP Setia was sold purely on the grounds of valuation. The stock had been good value on an earnings basis as well as underpinned by asset prices. However, after the dramatic move in the share price, the valuations were no longer backed by earnings and were priced solely on the expectations of further large landbank revaluations.

SP Setia is a well-managed Malaysian mass-market residential developer. New transport infrastructure is being built close to the company's landbank, enabling healthy margins as the land becomes more desirable. The company's projects are not speculative, and are selling well despite the interest rate hikes in Malaysia. The company has low gearing, strong cashflow and a dividend yield of 7%.

Sedol	Type	Price	Date
6868774	Buy	MYR 5.754	22/01/2007
6868774	Buy	MYR 3.837	05/05/2006

Sun Hung Kai Properties. One of Hong Kong's top three property developers, with a tilt towards the residential market. Unlike most world property markets, prices in Hong Kong are actually below those of ten years ago. Meanwhile, affordability has improved significantly. Local banks have very low loan-to-deposit ratios and thus credit is available, and cheap. The local dollar's peg to that of the U.S. is also likely to create a perverse reaction - as although the currencies are linked, interest rates are not and it is likely that local rates tumble to absolutely minimal (and negative real) levels. With a strong balance sheet, good land bank and a long tail of projects to be developed, the company should be a prime beneficiary of the upturn now commencing.

Sedol	Type	Price	Date
6859927	Buy	HKD 147.00	04/02/2008

We sold out as we believe the peak of the earnings cycle has been priced into the stock. In addition, we anticipate that earnings growth will slow sharply due to a strengthening yen, weaker Indian sales, and slowing demand from western markets as the availability of credit dries up.

Suzuki Motor Corp is a leading manufacturer of motorcycles and light autos. It has a market-leading position in Japan and strong brands across Asia. Exposure to the US is low, with 93% of operating profits earned in Asia (including Japan). Sales growth over the next few years will be driven by high-margin motorcycle sales, especially in Indonesia and Thailand, making this a good play on Asian consumption.

Sedol	Type	Price	Date
6865504	Sell	JPY 2974.126	18/02/2008
6865504	Buy	JPY 3456.829	01/02/2007
6865504	Buy	JPY 3302.809	12/12/2006