DO ASIAN CONGLOMERATES OFFER ATTRACTIVE RISK-ADJUSTED RETURNS?

Equity markets typically ascribe a discount to the valuation of conglomerates, where the market value of a conglomerate is lower than the sum of the values of the individual businesses, due to lower synergy among component businesses and, in certain cases, a complex organisation structure. But debt markets, especially in Asia, view conglomerates favourably, with the debt issuances of these entities frequently being over-subscribed and credit rating agencies ranking these issuances as investment grade.