Value Forecaster, Pilot Hill, Calif., touts the Taiwan Fund (NYSE, TWN, $25.75) as the best play in the world's hottest economy. "It has had the fastest growing real gross domestic product for the last four decades. The real economy should grow at least 7 percent in 1992. "
"The fund now trades at a 13 percent premium to net asset value. We also note that Taiwan's economy remains closely linked to China; the lure of profits has cooled the long-standing friction between the two countries.
"Given the excellent economic prognosis of the region and today's cheap valuation, Taiwan Fund is an easy triple -- and possibly more -- through 1995-97."
"A 245-square-mile tropical island in the South China Sea, the Republic of Singapore has achieved real economic growth second to Taiwan, about 10 percent a year since 1987," notes Value Forecast.
"Staunchly procapitalist government encourages foreign investment, now $2.5 billion annually. The country has a strict government. As an example, by mid-decade every auto will have electronic license plates so that sensors can charge motorists for using public roads. Singapore Fund (NYSE, SGF, $11.25) trades at an 11 percent discount to its net asset value, which is good enough for a triple by 1995-97."
Value Forecast also recommends The Malaysia Fund (NYSE, MF, $13.25), which trades at net asset value.
"These fairly valued shares could easily double or triple in the next 3-5 years," it said.
"The Malaysian economy has risen steadily since the fall of the Communist Party in neighboring Indonesia in 1966 and the start of land reform in 1968. Like Singapore, economic share is still small enough not to excite the envy of larger players, so Malaysian relative strength may persist for decades to come. Real GDP growth was 8.5 percent in 1991, and will likely be 7 percent in 1992."
Value Forecaster also recommends The Thai Fund (NYSE, TTF, $xx)
"Thailand has a big foreign trade deficit. The deficit stems not from excessive public spending, but rather from a boom in private sector investments.
"Real GDP should grow 9 percent in 1992, and real incomes should grow 7 percent annually over the next 5 years. Half the population is under 20 years of age.
"The easiest play is the Thai Fund, which has large positions in companies that will benefit from infrastructure work.
"The fund trades at a 3 percent discount to net asset value. I expect a doubling or tripling in price by 1995-97."