Disruptive technology offers investors opportunities: PineBridge

Mr Graeme Bencke, PineBridge global equity strategy head, sees strong prospects in disruptive technologies.
Mr Graeme Bencke, PineBridge global equity strategy head, sees strong prospects in disruptive technologies. PHOTO: PINEBRIDGE INVESTMENTS

The Internet of Things has the potential to create massive disruptions across industries but also offers opportunities for investors, according to global asset manager PineBridge Investments.

The firm also sees strong prospects in other disruptive technologies, such as targeted digital advertising, which makes use of data to deliver user-specific products and services, said Mr Graeme Bencke, the firm's global equity strategy head.

The Internet of Things consists of smart, connected objects in homes, businesses and the surrounding environment that can communicate with each other over a network.

PineBridge has US$80.7 billion (S$108.5 billion) in assets under management and is majority owned by a subsidiary of the Pacific Century Group, which is chaired by Hong Kong tycoon Richard Li.

Firms benefiting from mobile usage and from corporates and individuals who are increasingly accessing the cloud offer strong prospects over the next two to five years, said Mr Bencke, who is based in London and was in Singapore yesterday for meetings. These include telcos, software firms that make applications, and firms offering hardware.

Mr Bencke added that stock markets everywhere "look expensive" - especially high-yielding stocks - as global growth continues to flounder and investors hunt for yield. This has driven up valuations, especially in hot sectors like tech.

But Mr Bencke said investors should also assess firms on metrics such as free cash flow, which is often used for acquisitions.

"While dividends might not be high, returns to shareholders can come in other ways," he noted.

Ms Elizabeth Soon, the portfolio manager for PineBridge's Asia equities - excluding Japan - said the outlook for the region is stabilising after a few years of volatility, and there are strong prospects for the consumer sector, particularly in China.

"Cyclical sectors are looking interesting in China... There could potentially also be more funds moving in from developed markets to Asia, which would be positive for the region," she added.

A version of this article appeared in the print edition of The Straits Times on August 23, 2016, with the headline 'Disruptive technology offers investors opportunities: PineBridge'. Print Edition | Subscribe