Although the EU and the US are in recession territory, prospects for growth in Asia remain strong, says Profit Hunter’s Manraaj Singh. This will be vital in sustaining global energy demand. It will also keep coal, the biggest source of energy for electricity production, in a long-term bull market.

This from Fleet Street Invest:

Asian markets got battered this morning.  In fact the regional MSCI Asia Pacific Index benchmark is now at its lowest point since November 2005.

The weakness in Asia’s stock markets this year is a short-term blip though. The region’s underlying growth story remains strong. So the current sell-offs offer a lot of opportunities for investors willing to take a slightly longer term view.

Yesterday the president of the Asian Development Bank predicted that the region would suffer less than expected from the global economic slowdown.

Long-term investment in the region is still strong. So is domestic demand. And Asia’s economies have also not been hit hard by the share market turmoil. Because most of these countries rely on banks to raise capital rather than on the financial markets, Asia is still in very good shape.

Of course the region can’t escape the global slowdown entirely. The ADB currently predicts that Asia’s developing economies will grow at 7.6% this year and 7.8% next year. But it is expected to revise that downward slightly in a report next week. But that compares very nicely with the EU’s predictions for Europe’s economy.

We seem headed for a recession by the end of the year here in Britain. That’s according to the EU’s Commissioner for Economic and Monetary Affairs. And so are Germany and Spain.

The key point here is that the economic growth in Asia remains strong. Fueling that growth will continue support demand for energy. 

This is a dirty business, but it is very profitable

Coal is a ghastly energy source. It is filthy and polluting. But there is also lots and lots of it. And it is cheap. So demand for it is growing fast.

Coal is already the world’s biggest source of energy for electricity production. And between now and 2030 it will be the second fastest growing source of energy after natural gas. A huge part of that growing demand is going to come from developing countries in Asia.

Just look at India. The country used 460 million tonnes of coal last year. But demand could hit 2 billion tonnes a year by 2031 to 2032. Coal is in a long-term bull market as long as the Asian economies keep growing.

P.S. Manraaj says he has a company on his investment watch list that is Asia’s biggest coal producer for power plants. It’s shares have been beaten down along with the rest of the regional market of late, but Manraaj is confident this play will yield huge returns when the short-term blip is over.

Source: How Asia’s Battered Markets Could Open a Massive Profit Opportunity