Amid the financial wreckage of Asia there has emerged a select band of companies whose fortunes have continued to rise on the stock markets, singled out by investors as havens from the storm. Concerns over lingering recession, slumping property prices, weak regional economies, and fears of a savage depreciation of the Hong Kong dollar have dealt a severe blow to most Hang Seng Index constituents, many of which are bank and property counters and thus highly sensitive to market downturns. However, some smaller companies - mostly industrials with business links to the United States and Europe - have seen their share prices surge. Norman Ho Man-kei, an assistant fund manager at Value Partners, said one of the principal concerns of investors had been to find companies able to weather the economic storms. 'Investors are looking at safe havens, that is companies resilient to recession and currency risks. The investment trend has been shifting from blue chips to fundamentally sound, smaller stocks.' A prime example has been educational toys manufacturer V-Tech Holdings, which has seen its share price almost double. The counter traded at $30.50 on October 9, up from $15.70 a year ago. Consumer-goods trader Li & Fung, micro-motor maker Johnson Electric Holdings and fast-food restaurant chain operator Cafe de Coral Holdings also have seen strong share performances. The Hang Seng Index, meanwhile, has fallen 40 per cent. With the Asian economies in tatters, companies that generated income from outside the region proved popular. V-Tech, Li & Fung and Johnson Electric make almost all of their sales in the United States and Europe. Tristan Chua Tianyu, an analyst at Goldman Sachs (Asia), said investors had bid up the counters on hopes the US and Europe would remain relatively immune to the economic woes. He said: 'The US continues to look a better place to do business, and the recent interest rate cut will help boost confidence and consumer spending.' The popularity of these safe-haven stocks was increased by growing concerns that Hong Kong's currency board might be swept away by the financial crisis. Far from easing concerns about the Hong Kong dollar peg, the Government's intervention in the stock market in August increased fears in some quarters for the safety of the currency link, and helped safe-haven stocks rise further. In September, several top European investment banks - including Indosuez WI Carr and Santander Investment - forecast that the peg would be broken as soon as December. They were backed by Hong Kong fund management firm Regent Pacific Group. Those companies with earnings in strong foreign currencies stood to benefit from any devaluation in the Hong Kong dollar as costs would diminish but their revenues would remain untouched. Li & Fung, one of Hong Kong's largest trading companies, has taken advantage of the sharp depreciations in Asian currencies. The company can source material at significantly lower cost through its agents in more than a dozen Asian countries. The trader sells about 30 per cent of its products to Europe and 60 per cent to the US. Mr Chua estimates the company's net profit will rise to $531 million for the year to March, up from $375 million the year before. Its shares have risen more than 30 per cent, from $9.10 on October 16 last year to $12.20 on October 9. Johnson Electric has been one of the few companies to post profit growth since the onset of the financial crisis. The company, which has mainland factories and sells to the US, saw its net profit jump 43 per cent to $626 million for the year to March. Despite being dropped from the Hang Seng Index last year, its shares also have risen more than 30 per cent, from $10.625 on October 16 last year to $14 on October 9. Cafe de Coral's resilience was put down to its recession-proof qualities. While the slump has pushed many retail and restaurant operators to the brink of bankruptcy, Cafe de Coral has seen profits rise. Chairman Chan Yue-kwong said the company aimed at the mass market rather than the higher end and had benefited from the recession as many consumers opted for cheaper eating. He said that by giving up one meal at a typical dim sum restaurant, consumers could have four meals at a Cafe de Coral outlet, and that was proving a big draw-card - both for customers and investors. The company's shares were trading at $1.89 on October 16 last year and were at $2.20 on October 9. Broker Peter Luk Kin-hing, who has seen his income dwindle along with the shrinking stock market, visits Cafe de Coral three times a week. 'We used to go to Yung Kee [an upmarket restaurant in Central] every day last year when the stock market was booming,' he said. According to The Estimate Directory, which collates broker forecasts for companies' financial performances, Cafe de Coral's net profit is expected to grow 5 per cent to about $150 million in the year to March 31. Mr Ho said there were other companies in the market that were sheltered from the financial crisis, offering potential windfalls for the discerning investor. He said: 'We have been trying to dig up more hidden small stars . . . Blue chips are not expected to perform well in the medium to long term, so we continue to look elsewhere.'