PROFITS growth in Asia is slowing but bargain stocks are emerging, according to Fidelity Investments' chief investment officer for Southeast Asia, William Ebsworth. 'Earnings growth is decelerating across the region though growth rates will remain in the mid-teens in most countries,' said Mr Ebsworth. Although corporations were beginning to grow slowly, some shares seemed to have good value. 'Valuations are reaching attractive levels,' said Mr Ebsworth. Fidelity, a United States fund manager with five million clients and US$300 billion invested on their behalf, tips Hong Kong and Indonesia to show the strongest growth this year. Singapore, Taiwan and India also offered value, it said. But more than markets, Fidelity is looking at sectors within markets. In South Korea and Taiwan, Mr Ebsworth expects exporters to benefit from the strong yen which will hit Japanese competitors. In Indonesia, it is consumer stocks which look good and, in Hong Kong, hotel and utility stocks. Mr Ebsworth said there were signs that Hong Kong people were returning to the residential property market but the commercial market could fall further. Hotels looked attractive as a property play because there was shortage of supply and no big new hotels were on the horizon while office space supply was expected to rise in future. 'Price-earnings ratios are below their five-year average,' said Mr Ebsworth. Other positive factors included a fall in the rate at which brokerages were downgrading earnings forecasts for the firms they covered and the prospect of US interest rates peaking. Mr Ebsworth said Indonesia was attractive because it had strong profit growth, partly because of a cut in corporate taxes last year. 'Indonesian valuations are also compelling,' he said. He said the price-earnings ratio was 12 times, which was below the bottom of its historical range.