Gary, we talked about india previously.
Let's move to one of the other countries in this part of the world, thailand.
Contraction of gdp taking place, political gridlock.
What is your point of view?
We are still cautious on thailand.
Investors picked up lessons from the past two years.
With political unrest in thailand, that is a time to buy equities.
I think the problem this time is more serious.
We don't have a government.
People talking about this as being a transformation period.
It's hard to see the light at the end of the tunnel.
The next elections, the opposition will boycott again and we don't have a budget.
I think this will rumble on a long time in thailand.
Now seems to be so appropriate for the emerging markets in asia.
While many of them have attractive valuations, structurally, they are so unsound.
How do you help your investors understand which markets are on the right track?
It's a tough one.
I don't think that period is over.
I think there are some selected ones.
The appetite among investors is in restructuring stories, india, right?
The one ibo haven't focused on enough, not in this region, but mexico.
Secondly, possibly china.
If they can execute these soe reforms, china stocks are still cheap.
On the china front, the property prices from over the weekend, certainly, we were discussing this morning a cyclical perhaps downwards arrow -- downward spiral.
Homeowner confidence, people are not buying necessarily.
How long does a cycle go before we see a change?
As far as the government is concerned, keeping prices capped is their objective.
If they can keep the economy is growing and real estate prices flat for a few years, that improves affordability.
In the short term, they have to be concerned, how much does growth spur in the rest of the year?
Telling the rest of the banks to ramp up their mortgage lending.
Local authorities want to unwind some of the restrictions on the part of the banks.
I think that is where we are.
They are getting a little numbers on how fast prices are coming down.
Are you allocating assets towards [indiscernible] or risk-heavy?
Number one, indonesia, which is very much like in india story but with still two months away from the election.
Number two would be china soe's. we have already had a big drop in the internet stocks in china.
We probably got further to go.
If we do see any signs of progress on soe's, their stocks are so cheap that they could do well.
Indonesia, two months ahead of the elections, you are confident it won't turn into a debacle or sort of unrest, etc.? no, just like in india, you buy on the rumor.
When he does get elected, then you start worrying about his ability to execute.
But as the expectations go up, and if we hear today he is appointing kalla as vice president, that is a positive.
Do you buy financial stocks?
Financials do look quite attractive.
There is a lot of wealth.
There is a lot of banks.
More bank accounts than in bangladesh.
But some are likely for consolidation.
You've got banks are micro-lending on the whole making nice returns.
Naturist -- net interest margins are still pretty high in indonesia.
Indonesia has a great future.
And then in 10 years time, it still has a great future.
Is not whether the marketer countries go to our bad, but moving in the right direction.
Indonesia still has a lot of problems.
It is a very poor country.
Infrastructure is still the key problem.
It will take much to push indonesia in the right direction.
It was eight to 10 years under spy.
If you can create more infrastructure and make it open for investment.
It seems like japan was one of those markets last year.
So far, investors seem to have lost so on any of the structural reforms.
What do you tell your clients?
I am underweight on japan.
If we look at the money that went in last year, it was $180 billion.
So far this year from only $13 billion has come out.
Everyone is sitting on a position that has lost.
It has underperformed in 12 months.
They'll hope it's going to get better.
The banks are going to do more or the government is going to deliver on these [indiscernible] waiting and waiting and waiting.
And the arrow has not been shot yet.
The bank of japan, any type of visa was not going to happen until spring, perhaps 2015. she changed her view to that a couple of weeks ago.
They cut their growth forecast but they didn't cut the inflation forecast.
They are being much too optimistic about inflation.
I think that is good to be a disappointment.
Everyone is inspecting jew -- expect -- everyone is expecting june or july when the government is when to do more.
They will tear their hair out saying what are we supposed to do because they have a government that isn't playing ball effectively.
It is now up to the government.
The third arrow, the optimist will tell you it is not a third arrow so get a new weapon.
It's a thousand different needles.
I just don't see it happening.
The problem is that every country has vested interest to prevent change happening in japan is a very good example.
It strikes me perhaps it is easy to make changes in indonesia or india in some ways, even with all of the separate voices feeding into the indian process.
Do you think that is the case?
I think japan culturally is a very consensus-driven society so that makes it particularly hard to change anything.
But i don't think it's that different.
Political scientist will tell you, if there is a reform which 95% of the population will benefit mildly but 5% will lose out, the reform won't happen because they will fight tooth and nail to stop it from happening.
Every country, that is the same story.
In the u.k., she did that but
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