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Tickers in this Article: CHRT, PHI, IIT, TLK, TSM, RIMM, BRCM, MSFT
This week's Investopedia world tour stops off in Southeast Asia. This area has long attracted a great deal of attention from investors drawn by the robust growth in countries like Thailand, Indonesia, Malaysia, and Singapore. Even more so than usual, though, this is a challenging region for individual investors to make direct investments. While I managed to find six listed ADRs, one of them has received a buyout bid another is a sub-$1 equity. (To learn how to invest in a foreign company through your local exchange, read What Are Depositary Receipts?)

That isn't to say that American investors are shut out from investing in Southeast Asia. There are many companies (especially Singaporean companies) whose ADRs trade on the pink sheets and do so in reasonable volume. Second, some of the larger brokerages will allow investors to buy shares on foreign exchanges, though there can be higher fees for doing so. Last, and not least, investors can turn to a combination of ETFs and mutual funds that focus on the region or specific countries. Examples include: iShares Thailand (NYSE:THD), iShares Singapore (NYSE:EWS), and iShares Malaysia (NYSE:EWM).

Name
Industry
Market Cap
Avg. Volume
Chartered Semiconductor
(Nasdaq:CHRT)
Semiconductors
$774M
<0.1M
Philippine Long Distance
(NYSE:PHI)
Telecom
$11B
0.2M
PT Indosat
(NYSE:IIT)
Telecom
$3.7B
<0.1M
PT Telekomunikasi
(NYSE:TLK)
Telecom
$14.8B
0.4M
Chartered Semiconductor
It is not easy to be the third-largest player in a highly competitive, virtually commoditized, industry, but that is what this operator has to face. Boasting customers like Broadcom (Nasdaq:BRCM), Microsoft (Nasdaq:MSFT) and AMD (NYSE:AMD), but competitors like Taiwan Semiconductor (NYSE:TSM), Chartered Semiconductor has seemingly chosen to sacrifice margin for market share. While the company is seeing good growth in more advanced business (like the 65nm segment) and the semiconductor space will rebound again, I think Chartered has set a challenging breakeven level of utilization for itself.

Philippine Long Distance
I have to admit a certain personal fondness for Philippine Long Distance (also known as PLDT), as I have profitably owned these shares many times over the years. PLTD is the dominant telecommunications provider in the Philippines and generates strong returns on capital, despite the ongoing capital expenditure needs that go with maintaining competitive telecom networks. Given its size within both the Philippine economy and stock market, it's often treated as a bellwether and national proxy - something that's good for shareholders when the markets are pro-Philippines, but not so good when sentiment turns more bearish.

PT Indosat
Indosat is neither large nor terribly liquid, but it does offer a play on a growing telecom player in a huge country. Indosat has roughly 25% of the Indonesian cell phone market and a partnership with Research in Motion (Nasdaq:RIMM) to market the BlackBerry (and related services) in Indonesia. I would argue that gives Indosat a leg up in generating more profitable business and a wealthier client base.

PT Telekomunikasi
Like PLDT, Telekomunikasi is a stock where I have some personal history. Like PLDT, Telekomunikasi is a dominant incumbent telecom player in a populous, growing country. Likewise, Telekomunikasi boasts reasonable returns on capital and a good dividend, but a fairly modest growth outlook. At the right price, Telekomunikasi stock could add valuable diversification to a portfolio, but investors should exercise caution as this one isn't likely to "grow its way out" of an overpriced multiple. (To learn more, check out Investment Valuation Ratios: Price/Earnings Ratio.)

Now it's your Turn
Investing in the growing economies of Southeast Asia is an above-average challenge for the individual investor. For those with the time and risk-tolerance, however, there's a sizable opportunity lurking underneath the surface. Please view this as a starting point for your own due diligence, and look for the next in our series of weekly world tours.

For further reading, check out our related article Investing Beyond Your Borders.

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