The efficiency that a conglomerate could generate has been a magnet for investors. For instance, San Miguel operates a broad range of businesses from beer to petroleum refining. Its potential was believed to be superior to its more specialised rivals.
Investors in Asean conglomerates have had a rough ride. A hundred dollars invested in the asset class in October 2014 would have produced a total return of 8%. This figure includes the dividends. The return compares poorly to that of investing in the Asean index, and is an appalling return compared to the Nasdaq. A hundred dollars invested in the Nasdaq would be worth $360 today.
The glory days before the Asian Financial Crisis were different. A hundred dollars invested in 1987 in a basket of conglomerates like Jardine Matheson, Keppel, Salim Group, and San Miguel would have quintupled in value by 1997.
