China is on track for sustainable growth, manager says

Richard Pan cites bargains in blue-chips and the rise of the "new" economy.

Michael Ryval 19 May, 2016 | 5:00PM

After the Chinese stock market suffered a major correction last fall, domestic equities tumbled into more attractive territory, says Richard Pan, head of qualified foreign institutional investors (QFII), at Beijing-based China Asset Management Co. Ltd. (ChinaAMC).

"Stocks on the CSI 300 Index are trading around 12 to 13 times forward earnings, or one standard deviation below the historical mean," says Pan, who heads a six-person team that oversees about US$1.5 billion in assets for segregated accounts.

The CSI 300 Index is a cap-weighted index that replicates the performance of 300 so-called "A" stocks trading on the Shanghai and Shenzen stock exchanges. Through the QFII scheme, foreign investors have access to about 2,800 Chinese companies, which taken together have a market cap of about US$6 trillion, versus US$20 trillion for the U.S. But, Pan argues, China is catching up -- and fast.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Alibaba Group Holding Ltd ADR206.16 USD-3.02
Tencent Holdings Ltd ADR49.41 USD-4.00

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Michael Ryval

Michael Ryval