Fidelity chief sees buying opportunities in volatile market

THE volatility now rampaging through Southeast Asia's stock markets would be the dominant theme for most of this year, leaving the door open for investors to take advantage of strong buying opportunities when prices weakened, said Fidelity Investment managing director William Ebsworth.

Mr Ebsworth said yesterday it was difficult to forecast how the region's market would perform this year, given the wide array of political issues such as China's MFN (most favoured nation) trade status with the United States and growing tension between North and South Korea.

However, he said Southeast Asia was still fertile ground for investment because of corporate earnings growth, solid economic fundamentals, growing spending on infrastructure, high savings and the deep pool of low-cost labour.

To capitalise on the markets' sharp swings, Mr Ebsworth said investors should focus on companies with quality earnings and low price/earnings (P/E) multiples.

He said Fidelity was a significant buyer of Jardine Matheson Holdings, for example, when the stock plunged to below $50 after the company announced its intention to delist from the stock exchange on December 31 this year.

''The Keswicks are minority shareholders but they behaved as majority shareholders and we take issue with what they did and what management did,'' Mr Ebsworth said. ''That aside, that stock is pretty cheap.'' While many investors, particularly retail investors in the United States, have shifted their focus away from Southeast Asia, Mr Ebsworth said there had been growing interest in traditional markets, such as Japan and Europe.