Aug. 29--Although markets have rallied in most parts of Asia, the long-term potential for further growth remains vibrant, a leading fund manager said in a recent interview with the Bangkok Post.

"We think that the worst is over for the region and despite the market rallies over the past few weeks, we still see long-term potential," said Nicholas Yeo, the fund manager for Aberdeen Asset Management.

Although he is firm about the worst being over, Mr Yeo remains cautious about the future saying that "it does not mean that we are out of the woods".

Mr Yeo, who was in Bangkok to pitch a new fund that was being offered from Aug 24 to Sept 7, says that although a lot of people may doubt the timing of this launch, it is not that bad a time considering the long-term gains.

He says that although the Chinese market may have seen a surge over the past few weeks to months, the long-term view is that China is a market to be in and one that would continue to reach new highs in the future.

China, whose economy has started to show signs of some recovery, especially in the export sector, is a market where equities are still reasonably valued and over the next decade the economy is poised to take huge strides.

China has been leading the world out of the deepest recession in 80 years, fired up by a $585-billion government stimulus package focused on infrastructure and record lending by the country's mainly state-owned banks.

The pump-priming momentum lifted industrial output growth to 10.8 percent in the year to July, a nine-month high and above June's 10.7 percent reading.

Exports, a key sector for China, showed signs of perking up, imports of crude oil and iron ore hit record levels and retail sales displayed the sort of strength that policymakers want to see as they strive to nurture domestic demand.

Overall, the barrage of figures indicated that the recovery remains on course and the government can be confident of achieving its goal of 8 percent growth for the whole year. "All this indicates that the economy in the region are gaining some momentum and therefore we are very optimistic about the corporate sector," Mr Yeo says.

He says that despite the economy having seen some shocks over the past few months, the corporate sector in the region have remained stable in terms of their balance-sheet strength.

Mr Yeo says that with China likely to achieve 8 percent GDP growth this year, it would be "icing on the cake" for the corporate sector.

Although most fund managers have basically written off the corporate earnings for 2009, they are now looking at the potential for 2010 and beyond.

But to be safe, Mr Yeo says that the fund would invest in mainly Hong Kong-listed companies that have large exposure to China.

"The reason for this is simply that we have to comply with the corporate governance issues and we think that the companies listed in Hong Kong are far more CG-complaint than those in the mainland," he said.

The fund called Aberdeen China Gateway Fund, a relatively low-beta fund will mainly invest in units of a foreign fund (Luxembourg), Aberdeen Global-Chinese Equity Fund (Master Fund).

The investment objective of this fund is long-term accumulated total return to be achieved by investing in equities and equity-related securities of companies with their registered offices in Chins, companies that have the bulk of their business activities in Chin, or holding companies that have the bulk of their assets in companies with registered offices in China.

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