Fund manager Ronald Chan thinks the regional economic turmoil serves as a wake-up call - one that in the long run will help companies grow more healthily.
'The recent Asian financial crisis gives management a lot to contemplate about the direction of their business and makes them focus not just on the growth of their company but more on shareholder return,' he says.
A fund manager for Dresdner RCM Global Investors, Ronald is in charge of the Little Dragons Fund, a US$40 million (HK$310 million) fund which specialises in small to medium-capitalisation companies listed in Asia outside Japan.
The fund is the biggest of its kind in the market.
For the Little Dragons Fund, Ronald picks stocks in Hong Kong as well as Singapore, Taiwan, South Korea and India.
Ronald notes a trend to out-sourcing in the electronics sector and believes that will benefit certain companies in Hong Kong and Singapore. Out-sourcing is when large US or European companies subcontract non-core business to smaller companies in Asia in order to reduce their cost and focus on their core business.
