Consumption the winner in 2015

Movies, malls, meals and medicines. If the best-performing stocks from each of Asia's 10 main markets outside Japan are any guide, then 2015 belonged to companies that catered to consumption. Not conspicuous, over-the-top gambling binges in Macau or splurging on expensive cars in Shanghai or Singapore, but small-ticket, largely middle-class spending.
Think of the winners' club as 10 separate tea leaves, each of which carries a little flavour of a single Asian market. When taken together though, the leaves make for an interesting pattern. Start, for instance, with Wanda Cinema Line. After all the nervous gyrations in Chinese equities, the movie theatre operator, which sold shares in January, is set to finish 2015 with an almost 1,100 per cent gain.
The Shenzhen-listed company, controlled by Asia's richest person, Wang Jianlin, is benefiting from a 41 per cent increase in box-office receipts in the first nine months of the year. At an estimated forward price-to- earnings multiple of 115, the stock may be overpriced. Nevertheless, Wanda Cinema's spectacular climb does add to evidence that China's shift away from exports and investment and toward more domestic consumption isn't a pipe dream, at least not entirely.
Besides, the consumption boost in Asia is giving an added fillip to corporate profitability, thanks to falling commodity and energy prices. Take SATS, 2015's best-performing stock in Singapore's Straits Times Index. The airline caterer produced almost 14 million in-flight meals between April and September last year, and ended up saving 15 per cent on raw material costs from a year earlier. SATS shares are up 27 per cent.
Shopping has been a rewarding theme for shareholders, more than Asian real estate. SM Prime Holdings, the star of the Philippine Stock Exchange Index, saw 11 per cent growth in retail and commercial rentals in the first nine months and a 30 per cent jump in revenue from subsidiary attractions like rides, bowling and ice staking, according to iTrade. Property sales grew four per cent. And despite the hype surrounding Asia's emerging e-commerce and digital champions, 2015 very clearly belonged to low-tech, old-economy equities. The one big exception was the Hong Kong-traded shares of Tencent, which returned a handsome 35 per cent.
The Asia top-10 list is also almost entirely divorced from finance, which isn't surprising considering the region has seen a massive increase in leverage, and companies and households are now looking to pare debt. None of the publicly traded banks, which feature prominently in benchmark national indexes, made the cut. - Bloomberg