Santa Lucia CIO and Portfolio Manager Explains Indonesian Elections and Chinese Cement for Investors

January 31, 2019

James Morton is Chief Investment Officer and a Portfolio Manager at Santa Lucia Asset Management Ltd. He has extensive expertise in recovering and small-cap companies, as well as emerging markets. Mr. Morton’s career in the investment industry began in 1985, and he was a subadviser to Mackenzie Cundill between 1996 and 2018.

He is an accomplished author, editor and investment columnist. Mr. Morton holds a degree in law from Trinity Hall, Cambridge University, and an M.A. in third-world economics as well as an MBA from Stanford University.

In this extensive and exclusive 6,835 word interview, James Morton discusses the Asian economic forecast and the stocks that will benefit.

“I think it’s interesting to comment on the dynamics in the political environment in the Asian part of the world compared to the U.S., North America and Europe. This will be quite a lively year — 2019 — since about 80% of the people in Asia who actually get to vote will be voting in the first half of the year. The most important of course being India, but Indonesia too. Also, Thailand looks like they’re finally going to have an election. And this has the potential to make a difference.”

This leads to some interesting picks.

“I’d like to start with West China Cement (HKG:2233). We like this industry because it’s been a story over the last couple of years of consolidation of market share within a circumscribed geographic area where cement plants compete. Consolidation has been driven by government policy to get companies to reduce pollution. That has been a big focus for the cement industry, and partly because of that, the government has not been pushing the industry so hard on pricing because they want them to invest in clean technology and upgrade their operations, and of course, that investment process caused smaller, less efficient, highly polluting plants to fall by the wayside. That led to significant market share concentration, with the result that margins in the industry have risen and the gross profit per ton is now in some places at the highest levels we’ve seen in recent history.”

To get the complete picture on this portfolio pick and many others from James Morton, read the entire 6,835 word interview in the Wall Street Transcript.