A hunt for growth stocks is underway in Singapore and aboard.
The pandemic has exposed weaknesses in some companies, prompting investors to search for more resilient businesses.
The COVID-19 virus has also triggered new trends, led by new habits and practices forming, while accelerating existing ones.
If you are an investor searching for growth, the hunt for opportunities could extend beyond Singapore.
There are many opportunities out there that can allow you to gain exposure to companies that post solid and consistent growth.
As the pandemic ushers in a new normal, we should also look around for the presence of enduring trends.
By latching on to some of these trends, we can find investments that will reward us for many years to come.
The Asian opportunity
We believe that the Asian region is where massive growth opportunities exist in the next decade.
China, India and Indonesia are among three of the world’s most populous countries.
Modernisation and infrastructure upgrades promise to usher in a new age of prosperity for Asia.
A growing middle-class segment is emerging, with huge implications for retail spending.
There are several ways to get exposure to this nascent but potential explosive growth.
You could buy into promising local stocks with significant Asian exposure, such as the local banks or a company such as Boustead Singapore Limited (SGX: F9D).
Alternatively, you could also purchase Hong Kong stocks such as technology giant Tencent (SEHK: 0700) or Alibaba Group (SEHK: 9988).
Finally, there are always US stocks with exposure to Asia.
We shouldn’t forget that many of our neighbours are still emerging economies. In terms of their development, they are today where Singapore was 10, 20, 30 or maybe even 60 years ago.
They could, one day, be where Singapore is today. Some might even overtake Singapore, if not for their considerably larger population.
Collectively, there are 640 million people (excluding China) who live in those countries. If we include China, it represents as much as a quarter of the world’s population.
That is a lot of mouths to feed, a lot of bodies to clothe, and a lot of demand for service companies to satisfy. There are also lots of opportunities for wonderful companies to tap into.
Some of these companies are already there. They already have a proven track record of success in their home markets. But they are eager to grow through overseas expansion.
Companies such as PepsiCo (NASDAQ: PEP) reported that organic revenue growth topped 30% year on year in its latest quarter.
And for Proctor and Gamble (NYSE: PG), a multinational consumer goods company, Asia Pacific and Greater China contributed around 20% of the company’s revenue for the fiscal year 2020.
Get Smart: Investing in A Growing Market
As companies around the world are rapidly expanding into the Asian market, they are also rewarding shareholders with a steady stream of dividends.
The beauty is that some of these companies have even been paying increasing dividends for many years, and through different economic cycles.
At The Smart Investor, we are actively participating in this growth and open ourselves up to this massive opportunity.
These long-term trends will usher in a new era of prosperity for Asia, and along with it, bring wealth and riches to investors who select the right businesses to ride the wave.
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Disclaimer: Royston Yang owns shares in Boustead Singapore Limited.