Pidcock’s view is that economic growth generally in Australia will improve further and the country is well positioned to benefit from other broader trends in the global economy. For example, one of the 16 stocks he holds in Australia is Sydney Airport Holdings, which he sees as a play on the regional tourism growth story that is linked to the steady rise in the Asian middle class and the increase in Chinese tourists.
His focus on infrastructure and utility companies has also led him to hold AGL, the biggest utility in Australia, which he notes is about to create one of the world’s biggest “virtual” solar power plants.
“They are connecting houses that have solar panels on their roof to a grid to essentially be equivalent to a power plant. The houses can supply or take energy as they need it, but AGL will manage that in a relatively efficient way, as opposed to houses simply producing just for themselves,” he says.
Overweight in Singapore
In south-east Asia Pidcock is overweight Singapore relative to the rest of Asean, where he favours real estate investment trusts over banks and finance companies. He also likes Singapore Telecommunications because of its regional footprint and the conglomerate ST Engineering.
Elsewhere, he favours healthcare companies in Thailand and Malaysia, which either dominate the local market or have a large presence in the region.
In the Philippines he owns Universal Robina Corp, a large food and beverage firm, which has recently expanded into Australia and New Zealand.
After watching the region for more than two decades, Pidcock believes regional demand growth has made Asia more immune to the issues of low growth in the developed world and rising political risks.
“They are building for each other, they are wealthier countries and they are more populated than they were, so I do not think they are quite as dependent on demand from the US and Europe.”
