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'Well-managed companies' make India one of Asia's top four favourites: Morgan Stanley

Morgan Stanley Dean Witter, a leading global financial services firm, regards India as one of its four favourite economies in the Asian region and has expressed optimism about the country's economic performance in 1999.

At a media briefing in Hong Kong today, Morgan Stanley managers said a wide spectrum of well-managed companies offering investment opportunities was the reason why they would favour India in the coming year.

The other favourites for 1999 are Hong Kong, Singapore, and Thailand.

Predicting an upward trend in the Asian region, regional strategist Markus Rosgen said 1999 would continue to be a year of adjustment for Asia, though it is likely to be less severe than 1998.

He said equity markets would be driven by low interest rates with the earnings recovery expected to occur towards the end of next year.

On Thailand, whose economic crisis in 1997 had thrown the entire South-East Asian region in turmoil, Morgan Stanley said its economy is expected to bottom out in the first quarter of 1999 and to post a positive growth in the second quarter.

Morgan Stanley's senior regional economist Tim Condon outlined his views on the region's economies. "Seldom has the potential for Asia to deliver high-quality growth that rewards both labour and capital been as great as it is now."

He believes that the theme of restructuring in the crisis economies of South Korea, Malaysia, Indonesia and Thailand is likely to be subordinated, at least initially, to the theme of economic recovery.

He was optimistic about Singapore, stating that it is the region's easiest macro-economic 'call' and could be the best restructuring story.

"Singapore is the only economy in the region that has used the regional crisis to accelerate opening-up reforms," he said.

On Hong Kong, the managers felt that though the economy may stop contracting towards the end of 1999 and rebound in 2000, sustained economic recovery depends on structural reforms that will restore the city's competitiveness.

Economist Andy Xie was confident that China will maintain a relatively high growth rate of 15 per cent for state-sector investment in 1999, which is sufficient to maintain a GDP growth rate at the same level as 1998.

UNI

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