Investors must look beyond the headline Asian growth story and understand exactly where companies are putting their excess cash flows, according to Michael Godfrey, manager of M&G Asian fund.
Godfrey asserted that investors continually over-pay for growth and that, while Asian companies have had ample opportunities to grow over the past decade, they have not necessarily performed well. "The growth story does create problems. If you grow badly, you can destroy return on capital; if you grow well, you can create tremendous amounts of value," he said. "The companies themselves haven't always known how to grow. They haven't really understood that having 7-8pc GDP growth is a very good thing, but you have to be very careful about where you reallocate your cash flows to take adva...
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