On CNBC Today Talking About China: A Long-Term Play, But Not Yet!

Be patient if investing in China: Fund manager

Edmund Shing, global equity portfolio manager at BCS Asset Management, discusses China's economy and its recent easing policies.

CNBC Video Link: Discussing China

CNBC Guest Host: Talking about China (amongst other things)

CNBC Europe: Squawkbox programme - Video Link below:

Chinese market volatility worrying: Strategist

Bloomberg TV interview this morning - discussing China, Greece...

BCS Asset Management Global Equity Portfolio Manager Edmund Shing discusses 

• China’s Flash PMI data, 
• Greece’s debt deal and 
• where he sees opportunity. 

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He speaks to Bloomberg’s Mark Barton, Caroline Hyde and Manus Cranny on “Countdown.” (Source: Bloomberg)

Bloomberg TV Video Link Below:

23/04/15 Bloomberg TV Interview:
Edmund Shing on China, Greece, opportunities

CNBC Squawkbox Guest Host: Video on Chinese, Hong Kong Equities Value

Edmund Shing, global equity portfolio manager of BCS Financial Group, says he still sees value in the Hong Kong and Chinese stock markets.

Please click below to view the VIDEO Link:

CNBC TV: See value in Hong Kong, Chinese equities: Pro

CNBC Europe Squawkox appearance: Why I Like Chinese Stocks

A second video clip from my Guest Host appearance on yesterday's CNBC Europe's Squawkbox programme:

CNBC: Why Take a Closer Look at Chinese A-Shares

IBT UK: Forget 'Slowdown' Worries, China is a Compelling Investment Opportunity With 7% Growth

Please click on the link below to read my latest article for the International Business Times on the investment allure of China:

Forget-slowdown-worries-china-compelling-investment-opportunity

You can also watch my interview on China with IBT UK editor-in-chief George Pitcher here:

There are times in investing when going against the flow can be very profitable. I believe that investing in China today is one of those times.

Conventional wisdom holds that the Chinese growth "miracle" is over after a number of years growing at a double-digit rate, with the economy now slowing rapidly. Writing recently in the Guardian, renowned economist Kenneth Rogoff highlighted the risk of Chinese slowdown, pointing out a number of key challenges that could derail the Chinese government as they seek to rebalance the behemoth that is the Chinese economy.

But, as is often said in financial markets, there is a price for everything. Moreover, money is rarely made by investing in what is comfortable – government bonds being a case in point at the moment, relatively safe but offering only ultra-low yields. China looks a compelling investment opportunity at the moment, in spite of the widespread "slowdown" worries.

China is still growing at over 7% per year...

Whatever concerns economists may have over China, let us not forget this Asian giant is still growing at over 7% per year in real terms; compare that to the sub-3% growth of the UK, and the non-existent growth in the eurozone.

World Bank Advises China to Lower 2015 Growth Target to 7%
'The Chinese stock market is one of the cheapest stock markets in the world'(Reuters)
This sounds strong to me, even if no longer a double-digit growth rate. After all, the law of large numbers makes it increasingly difficult for China to continue to grow at such a fast rate, now it is officially the second-largest economy in the world after the US when adjusting for the cost of living (according to the World Bank), more than double the size of the third-placed country, India.

Chinese Stocks Are Very Cheap

The Chinese stock market is one of the cheapest stock markets in the world, when judging by a standard metric such as price/earnings (P/E). Chinese stocks on average trade at under 9x forecast P/E, while offering a dividend yield of well over 3%. Compare this to the US stock market which trades at over 15x P/E, or the FTSE 100 which trades at nearly 13x P/E. In addition, profit growth is forecast to remain in the double digits, more than can be said for the European and US stock markets next year.

Chinese stocks are starting to outperform

The MSCI China A-Shares exchange traded fund (ETF) listed in London has gained nearly 26% over 2014 to date, already an impressive return and far outstripping a US S&P 500 ETF (+13%), a Europe-ex-UK ETF (-6%) and a FTSE 100 ETF (-4%).

But since the beginning of 2009, Chinese shares have only gained 47% in total (including dividends) in sterling terms, versus +115% for the S&P 500 and +77% for the FTSE 100, suggesting that there could be a further catch-up effect to come (Figure 1).

So in my eyes, the three factors value, growth and price momentum all line up for Chinese stocks. How might you buy into this theme in your own portfolio? I can suggest a three easy alternatives, via exchange-traded funds and via investment trusts.

1. The CSOP Source FTSE China A50 UCITS ETF (code: CHNA). This London Stock Exchange-listed fund invests in China A-shares, which remain the best-value type of Chinese stock available and invests in large financial companies such as insurer Ping An, bank China Merchants Bank and oil company Petrochina.
   
2. The Fidelity China Special Situations Fund (code: FCSS). This is an investment trust that invests selectively in a range of large- and mid-cap Chinese stocks, and which currently trades at a near-13% discount to the fund's net asset value. That means that you can currently buy 100p of Chinese stocks for just over 87p, not a bad deal!
   
3. A third option is to invest indirectly in the China theme via a fund containing stocks listed in Hong Kong. This can be done with the Invesco Powershares FTSE RAFI Hong Kong China ETF (code: PSRH), which invests in the likes of property company Cheung Kong Holdings and airline company Swire Pacific (the parent company for Cathay Pacific). 

Alibaba.com to list at a mammoth $150-200bn? How to profit

The Chinese business-to-business (B2B) and business-to-consumer (B2C) e-commerce platform Alibaba has finally filed for a US flotation (Initial Public Offering) today, due to list in the near future in New York. Current analyst estimates pitch the starting market value of the entire company at between $150bn and $200bn, a massive public company by any standards and likely to represent the largest technology IPO since Facebook came to market back in 2012.

The business, headed by former English schoolteacher Jack Ma (no wonder that he speaks English so well!), dominates business to business e-commerce transactions, typically between suppliers and customers not only in China, but effectively globally.

While a detailed description of all Alibaba’s businesses is beyond the scope of this (short) article, there is more detail to be found here on cnbc.com, for those who are interested in finding out more about the company.

Alibaba by the numbers

Just a few numbers to illustrate its 400lb gorilla-like presence in this technology transaction space:

• Over 1.5 trillion yuan, or $248bn in value of transactions executed over the last year through its 3 main marketplaces;
• 11.3 billion orders placed annually;
• 231 million annual active buyers;
• 8 million active sellers;
• 5 billion packages generated on their Chinese retail marketplace last year;
• $5.66bn of listed revenue for the 9 months to 2013 year-end;
• Net income (profit after tax) of $2.85bn for the same period.

This puts Alibaba ahead of Amazon plus Ebay together in terms of numbers of buyers and volume of transactions, according to Reuters! (Bear in mind that Amazon has a total market capitalisation in the US of $135bn, while Ebay is worth over $64bn currently).

Where could it be in the list of biggest listed companies?

At the upper estimate of a starting market value of $200bn, Alibaba would be the 14th-largest company listed in the US, between the bank JPMorgan and the telecoms company Verizon. In the Technology sector, only  Apple (market value of $512bn), Google ($350bn) and Microsoft ($323bn) would be larger. Note: at $200bn, it would have a larger value than the technology grand-daddy IBM ($192bn market value)!

Even at the lower estimate of $150bn, Alibaba would sit at number 23 in the list of largest listed US companies with the same market value as Facebook now, over 7 times more than Twitter and 9 times more than Linkedin.

How to get exposure in Alibaba?

Please click on the link below to see how you can get exposure to Alibaba...

Alibaba-com-to-list-at-a-mammoth-150-200bn-how-to-profit