Analyst: Aberdeen Asset Management

The company’s head of Asian equities believes overseas customers will no longer be able to spend so freely given the state of the banking industry and the expectation of tax and interest rate increases over the next few years.

"It means Asian economies and markets will become increasingly driven by the domestic consumer and less dependent on traditional exports," he insists. "They have seen the volatility caused by being so externally reliant and need a better balance."

This is one of the key themes in the £1.5bn Aberdeen Asia Pacific fund, which is managed on a day-to-day basis out of Singapore, and aims to generate capital growth by investing in countries of the Asia Pacific region, excluding Japan.

"The consumer story can be played in a lot of different ways and not just through stocks such as supermarkets," explains Mr Hames. "Even financial services are a great consumer play because this is where the growth in banking has come from."

The fund, which is AA-rated by both Standard & Poor’s and Old Broad Street Research, is managed on the team approach that was developed 20 years ago by Hugh Young who, along with Peter Hames, still has the final say on portfolio construction.

"There is a team of 14 running this fund and we are all managers and analysts," explains Mr Hames. "We never invest in a stock unless we have met the management and last year we saw 1,500 companies across the region."

The fund has a two-tier investment approach. The first point is finding the right quality companies, while the second is making sure it is the right price, with prospective holdings analysed by various metrics.

"Quality is subjective but we look at factors such as its strategy, the management track record, and corporate governance issues," he adds. "We also like clean companies with strong cash flows and not much gearing."

One issue with investing in the region, however, is the difference between the macro story and the available stocks, points out Mr Hames, who cites the example of China where many companies are state owned and have complicated structures.

"Everyone is talking about China’s rapid growth, but we find it hard to find real quality companies - and the prices of those are too high."

He contrasts this with India. "It has always been slower-growing than China and is a very mature stock market, but lots of companies have been around for a long time, and levels of transparency are very well established," he says.

"They understand the concept of shareholder value and you get a huge diversity of private companies in really interesting businesses."

Elsewhere, Taiwan is seen as difficult because of its focus on electronics and other cyclical businesses which can be extremely volatile and do not fit in with the team’s steady growth approach to investing.