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International brokerage Credit Suisse is betting on Indian Information Technology companies, Korean autos and others in a bid to pick companies which could outperform in the Asian region.
All of these are plays on the recovery in the United States of America's economy.
The Asia Equity Strategy dated 30th August noted that companies focused on the United States have tended to outperform others in the Asian region.
“We believe valuations and EPS(Earnings Per Share) revisions still favour US exposure with FX(forex) tailwind. This basket includes Indian IT, Korean autos, Samsung Electronics and TSMC,” said the report authored by research analysts, Sakthi Siva and Kin Nang Chik.
It also noted that some of the stocks within the US exposure theme have moved to a significant premium over others in the region having outperformed the region by around 18% so far this year, suggesting some risk of profit-taking.
“Some stocks in our US Exposure basket such as TCS have moved to premiums of 262% versus the region, it still highlights discounts of 85% for Kia Motors, 77% for Samsung Electronics and 65% for Hyundai Motors,” it added.
The S&P BSE IT index was up 6.4% over the last one week and 39.81% over the last one year.
