``ASEAN is something of the forgotten entity in Asia these days as investors obsess over China and India. Still it is a very large region with many unique strengths and we remain focused on its long-term potential as a home to many excellent Asian companies. Thailand is one of the world’s great tourist destinations and one of the largest agricultural exporters. It has quietly built a significant automotive industry in recent years. Singapore has come out of a long slump and is enjoying the lowest unemployment rate in over a decade. Indonesia has been a darling of global investors and its very young democracy continues to make progress against a host of challenges. The region is finding a way to provide goods and services to China, Japan and India, with entrepreneurs as the real driving force, not the politicians or generals.”- Mark W. Headley, President and Portfolio Manager, Matthews International Capital Management, LLC
Finally, going back to Asian markets, the bullish case for investing in equity markets in Asia aside from the macro prospects are also due to the corporate fundamentals, i.e. steady improvements on Return on Equities (RoE) and above par dividend yields
Figure 6: Guinness Atkinson Funds: Steady Improving Returns on Equity
According to the latest Asian Brief by Guinness Atkinson Funds (emphasis mine), ``Over the last eight years attitudes in Asia have changed; markets and customers have grown more sophisticated as have the companies that serve them. Asia is still a high growth area and there are young and high growth companies emerging all the time. But there are now many more established businesses operating in this high growth region. These businesses now focus more on their main activities, have divested non-core divisions and are concerned more with profitability than empire-building.
``This has led to a big increase in the number of dividend paying companies in Asia and has also led to Asia becoming one of the highest yielding regions in the world…It stands in marked contrast to stocks in developed markets such as the US where the dividend yield is hovering around 2% and where the payout ratio has declined over the past 10 years.”
| | Dividend Yield 2006E (%) | Dividend Yield 2007E (%) | Payout Ratio 2007E (%) |
| China | 3.17 | 3.83 | 41.86 |
| Hong Kong | 3.64 | 3.99 | 52.97 |
| Indonesia | 3.52 | 4.50 | 49.10 |
| Korea | 2.23 | 2.54 | 23.63 |
| Malaysia | 4.62 | 4.62 | 57.85 |
| Philippines | 3.89 | 3.38 | 45.60 |
| Singapore | 4.58 | 4.11 | 58.88 |
| Taiwan | 3.95 | 4.48 | 55.45 |
| Thailand | 4.83 | 4.92 | 44.82 |
| India | 1.70 | 1.89 | 20.94 |
| Asia ex Japan | 3.29 | 3.65 | 41.43 |
Table 1: Guinness Atkinson Funds: Asian Dividend yield
Corporate fundamentals, aside from the hunt for yields, have been the flanking support drivers for the Asian Markets, backed by many high growth areas/opportunities, improving returns on equities and rising dividend yields in general (except the Philippines, Singapore and Malaysia), as shown in Figures 6 and Table 1, courtesy of Guinness Atkinson Funds.
This should enlighten us why the region has become a magnet for cross-border capital flows and reinforces my belief that the secular advance phase of the Philippine financial markets has an ocean of expanse for growth OVER THE LONG TERM HORIZON. 
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