Monday, August 29, 2005

Real Estate Markets in Asia To Outperform Stock Investments : Expert

`Dr Doom' eyes Asian real estate
INVESTMENT: The real estate markets in several Asian countries are underdeveloped and should outperform stock investments, emerging markets expert Marc Faber said
By Jackie Lin
Taipei Times, Friday, Aug 26, 2005,Page 10

Investors should pour money into Asia's underdeveloped housing markets as they are expected to yield higher returns than stock investments, emerging-markets expert Marc Faber said in an interview in Taipei yesterday.
Faber, popularly known as Dr Doom due to his ability to forecast when economic bubbles will burst, suggested that the real estate markets in India, Vietnam, Malaysia, Thailand and Indonesia are favorable targets.
Investment opportunities, however, exist everywhere as long as investors take advantage of local knowledge of the cities they reside in, such as Taipei, Taichung or Kaohsiung, he said.
Therefore, betting on local housing or stock markets would appear less risky than speculating on overseas markets, Faber added.
Faber, publisher of a monthly investment newsletter called the Gloom Boom and Doom Report and author of the bestseller Tomorrow's Gold, was in Taipei at the invitation of the Chinese-language weekly Business Today to give a speech and share his insight into investment trends.
Marc Faber Ltd, the investment company he established in Hong Kong, currently manages assets equivalent to around US$300 million.
While skyrocketing crude oil prices have forced people to tighten their belts, prices will keep going up, considering limited supply and increasing demand, especially from Asian markets, Faber said.
Global oil production is at 82 million barrels per day. Of that, Asia consumes 21 million barrels a day, while the US uses 22 million barrels per day.
In the next 10 to 12 years, Faber expects Asian demand to double to around 40 million barrels a day, causing a shortage and pushing up crude prices.
Turning to local stocks, Faber expressed optimism, saying that some Taiwanese companies have achieved a 5 percent dividend yield, making them favorable targets.
"I'm tempted to buy some shares in Taiwan. Along with Japan, Taiwan could actually perform quite well," he said.
The TAIEX has been fluctuating above 6,000 points this year, closing down 17.58 points at 6109.66 yesterday.
He said the nation has potential, given significant numbers of professionals in the high-tech, biotechnology and nanotechnology fields.
However, the government should launch direct links with China right away, he said, as they will bring more advantages to Taiwan than to China. Lifting restrictions to allow businesses to set up factories across the Taiwan Strait will enhance corporate competitiveness, he said.
The problems Taiwan faces regarding the migration of industry to China are the same ones challenging Japan and other advanced nations, he said.
The government should instead emulate Singapore and focus on developing the service and education sectors, he said.
Asked about the golden rule of investing for the general public, he said, "Don't listen to analysts. Listen to the markets."


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