“Company valuations are compelling. Of course, they may get cheaper still given the uncertainty surrounding the global economy, but with Asia set to emerge from the credit crunch stronger than ever, now is without doubt one of the most attractive times to invest in Asia Pacific equities that I have witnessed in over 25 years in fund management,” said Mr Young.

One reason for Aberdeen’s optimistic view of Asia are the differences in consumer and corporate tendencies between developed and developing economies.  While consumers in developed nations have tended to consume and borrow to excess, Asia has over-saved, meaning that the region is now on a sounder economic footing than many developed markets.

Similarly, Asian banks tend to be more conservative than their counterparts in the US and UK, and have stronger loan-deposit ratios, meaning they are better placed to withstand a downturn.

“2009 will be another difficult year for economies and stock markets around the world. While Asia won’t be immune from the effects of the global slowdown, the region’s low levels of consumer, corporate and government debt leave it better placed than most," said Mr Young.

Across sectors many Asia companies have low levels of debt and are producing healthy cash flows, but Aberdeen follows a “bottom up” investment process and remains highly selective on individual stocks.  The firm’s portfolio is focused on companies which are attractively valued, but exhibit good management. 

As such, India, which the firm says has a “wealth of well-run companies”, is a key overweight for Aberdeen, as is Singapore, which despite having slipped into recession is home to many solid companies. 

While Aberdeen’s view of Asia is positive, Mr Young stresses that investors should take a long-term view of the region.  In the near term, equity performance will depend on the severity of the economic downturn and Asia will not be able to escape the short-term pain of decreased Western demand for manufactured products. 

However, it is Aberdeen’s view that in future Asia will become increasingly decoupled from the West and domestic, rather than external, consumption and investment will mark the next stage in the region’s development.

As at 30 September 2008, Aberdeen Asset Management managed assets of over £12.4 billion ($22.1 billon) invested in Asia-Pacific equities.  The firm’s Asian equity team is headquartered in Singapore, with investment managers based Bangkok, Hong Kong, Kuala Lumpur, Sydney and Tokyo.