Emerging markets remain one of the most misunderstood areas of global investing. They can be volatile, politically complex, and often driven by sentiment rather than fundamentals. But for Matthew Wolf, their appeal lies in selective opportunities where high-quality businesses temporarily fall to irrational valuations. His approach is simple: identify market-leading companies, study their long-term fundamentals, and act decisively when prices disconnect from intrinsic value.
Over the past year, Matthew applied this philosophy in China and Indonesia — two markets facing heavy external pressure and pessimism. Rather than treating negative sentiment as a red flag, he approached it as an analytical moment: a chance to determine whether the weakness was justified by fundamentals or created by broader market fear.
Identifying Mispriced Leaders in China
In 2024, Matthew invested in two major Chinese blue-chip businesses — Tencent and China Merchant Bank. The backdrop was a prolonged downturn in the Chinese equity market, driven more by macro sentiment than underlying company performance. For many global investors, uncertainty pushed these stocks onto the sidelines. Matthew viewed it differently.
His reasoning was based on the structural strengths each business still held:
- Tencent remained a core digital infrastructure company with durable cash-flow generation, strong market share, and a long runway of monetisation.
- China Merchant Bank stood out as one of China’s highest-quality financial institutions, well-capitalised, conservatively run, and historically resilient.
He entered both positions at a deep discount. As confidence returned to parts of the Chinese market, valuations began to rebalance. China Merchant Bank re-rated significantly, and Matthew exited the position once the market corrected towards fair value. Tencent continues to be monitored with the same disciplined, fundamentals-first lens.
This cycle — identifying dislocation, acting selectively, and exiting when value normalises — sits at the core of his emerging-market process.
Finding Long-Term Quality in Indonesia
After the China positions began to recover, Matthew turned his attention to another undervalued market: Indonesia. His focus there led him to PT Bank Central Asia (BCA), widely regarded as the strongest bank in the country.
Despite its reputation as a premium institution, BCA had fallen sharply and was trading at an attractive valuation. Matthew’s rationale was grounded in the fundamentals:
- BCA has the highest credit quality in Indonesia
- Its deposit franchise is unmatched
- Digital adoption and customer retention are market-leading
- Long-term loan growth and profitability remain robust
For Matthew, BCA represents the ideal emerging-market opportunity: a strong business temporarily mispriced due to short-term sentiment. Instead of reacting to noise, he applies a consistent analytical framework — one designed to filter out emotion and focus purely on measurable company strength.
A Consistent Philosophy Across Markets
Whether assessing Chinese technology or Southeast Asian financials, Matthew’s approach does not change:
- Concentrate capital in high-conviction ideas
- Prioritise businesses with durable competitive advantages
- Perform deep, fundamental, company-specific work
- Ignore speculation and sentiment-driven narratives
- Exit positions when valuations reach fair value or the thesis changes
It is an approach built on discipline, patience, and a willingness to form independent views, even when broader markets disagree.
Why Emerging Markets Will Continue to Matter
Matthew expects selective opportunities in emerging markets to remain a long-term part of global investing. Structural growth, rising consumer demand, technological adoption, and shifting supply chains will continue shaping these economies. For investors willing to do the work — and willing to separate fundamentals from noise — these markets offer some of the most compelling mispricing opportunities available.
For Matthew, it isn’t about chasing growth or timing cycles. It is about understanding businesses deeply, assessing valuation with clarity, and trusting a disciplined process across regions.