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Michael Collins is an investment commentator with Fidelity Worldwide Investments.

Many of Asia's biggest stockmarkets had a poor 2011. That helped to make the steady performance of the four emerging ASEAN [Association of Southeast Asian Nations] countries in the MSCI Asia ex-Japan Index even more remarkable.

Stock benchmarks in the Philippines, Indonesia and Malaysia rose 4.1 per cent, 3.2 per cent and 0.8 per cent respectively last year, while Thailand's edged down just 0.8 per cent, even though the country suffered its worst flooding in nearly 70 years. These four countries plus Brunei, Cambodia, Laos, Myanmar, Singapore and Vietnam comprise the 10 members of ASEAN.

Singapore, which is classed as a developed market, is the only other ASEAN member in the regional index. Even though Singapore's Straits Times Index sagged 17 per cent last year, the performance of the island's four emerging neighbours meant ASEAN markets last year outperformed the MSCI Asia ex-Japan Index for the fourth straight year.

Like Singapore's, the other five markets in the MSCI Asia ex-Japan Index struggled last year. Equity benchmarks in India, China, Taiwan, Hong Kong and South Korea slumped 25 per cent, 22 per cent, 21 per cent, 20 per cent and 11 per cent respectively in 2011.

Singapore and the five non-ASEAN stockmarkets drooped as authorities battled inflation by tightening monetary policy and their major export markets of Europe and the United States struggled under sovereign debt concerns.

These six countries comprised 87 per cent of the MSCI Asia ex-Japan Index on 31 December 2011. That explains why over 2011 the Asia benchmark fell 17 per cent in US dollars and the same amount in Australian currency.

The Philippines, Indonesia, Malaysia and Thailand fared better because reforms enacted after the Asia crisis of 1997/98 have stabilised their economies, inflation is largely under control, these economies are more driven by domestic demand, and authorities are insulating their countries from global concerns.

Central banks in Indonesia and Thailand have cut interest rates in recent months and governments in all four countries are implementing fiscal stimulus. Thanks to these measures, ASEAN economies are expected to grow between 3 per cent and 5 per cent in 2012.

Evidence of the improved economic fundamentals of these four ASEAN economies include how government and household debt are low relative to gross domestic product (GDP). Indonesia, for instance, reduced government debt from 47 per cent of GDP in 2005 to 26.1 per cent by June last year, while household debt in Thailand is only at 27 per cent of GDP.

As trade among ASEAN nations sets fresh records, these four countries are running current-account surpluses - Malaysia's is 12.3 per cent of GDP - and have doubled, tripled or quadrupled their foreign exchange reserves in the past five years. The Philippines' foreign exchange reserves, for example, climbed from US$19 billion in 2005 to US$75 billion by September last year.

Importantly, for stock investors, corporate balance sheets are just as healthy, earnings are growing and valuations are attractive on these ASEAN markets.

For a fifth year?

The Philippines hosted Asia's strongest-performing bourse in 2011 after Fitch, Moody's and Standard & Poor's lifted their credit ratings or outlooks closer to investment grade due to the country's stable economy and improved government finances.

Inflation ended the year below 5 per cent while the economy is expanding at a 3 per cent clip, with spending stimulus to come.

Indonesian stocks came second for the year, after being Asia's best performers in 2010 and 2009. During the past 12 months, Indonesia regained its investment-grade credit rating after a 14-year lapse, the central bank cut rates twice to support growth and a law was passed that allows the government to acquire the land needed to create the infrastructure the country lacks.