Chris Prystay wrote about Southeast Asian investments in an article entitled Shelter in Singapore --- Analysts Say Oil Services, REITs Would Resist U.S. Slowdown (sub. req.).
One of the companies mentioned in the article, Keppel Corporation (KPELY.PK), is in my portfolio and remains very interesting for me as a bet on several SE Asian sectors. I went into the reasons why I like KepCorp back in April when I first purchased it, if you're interested.
The analysts quoted in this article believe the oil services and real estate sectors in Singapore, while they will be buffetted along with the rest of the nation's companies in the wake of Bernanke's interest rate decisions, should in the long term not be unduly harmed by the volatility of the US markets.
This is very good news for Keppel -- the article notes that they, along with Sembcorp, control most ocean rig construction in the world and that they should thrive as long as oil exploration and production remains profitable, due both to expanding demand for rigs and to the advanced age of much of the current fleet. The analyst, David Mok of DBS Vickers, believes that this demand cycle will remain in force as long as oil remains above about $30/barrel. I'd be more conservative and say I'd start to get worried if oil dips well below $50 ... but I don't see either of those scenarios playing out anytime soon.
But the other nice thing, not specifically tied to Keppel in this article, is that Keppel is a large conglomerate with a few key segments, nearly all of which appear to be useful hedges against US downturns if we follow the logic here.
Real Estate Investment Trusts in Singapore are also noted here as a good investment -- and Keppel has a hand in there with their Keppel Land subsidiary. While not specifically a REIT, they do manage similar properties and move with REITs in some ways. Investors have not bid up REITs as a safe haven investment in Singapore as they often do in the US, so the thought there is that they've been punished unnecessarily. Should be good news for Keppel Land.
The other big parts of Keppel, their infrastructure business and oil refining, are tied to SE Asian infrastructure (esp. water and electricity) and to global refined product demand. The refinery business has been subject to some severe volatility due to US gasoline formulation changes, but I expect the worst of that has passed, and the demand for imported refined fuels should continue to increase in the US as localities continue to block the construction of new refineries and, God forbid, hurricanes continue to damage the existing ones -- even if we don't consider the importance of growing domestic and regional demand for gasoline and other refined products in and near Singapore.
Nothing new here, just another perspective from some analysts to assuage fears that the US market and inflation/interest rate concerns will cause a global contagion that crushes everything -- there are places to put money where it should perform well over the long term regardless of the direction of US markets.