Three Ways to Invest in China
09/27/2016 10:00 am EST
Asian emerging markets still offer value - especially relative to the US and other developed markets - and corporate earnings continue to improve, asserts international investing expert Yiannis Mostrous, editor of Capitalist Times.
Real interest rates in China and other emerging markets in the Asia-Pacific region remain above long-term averages, giving central banks the capacity to pursue accommodative monetary policies.
Without overlooking the occasional policy misstep from Beijing, we've generally maintained a sanguine outlook for China's economy-a stark contrast to the many who have warned of an eventual collapse.
China's economy appears to be stabilizing, with the government seeking to ameliorate overcapacity issues and tackle other structural problems.
Although investors shouldn't expect a quick fix to these challenges, the authorities in Beijing continue to do a lot of things right in a difficult situation.
Investors should maintain exposure to China for the remainder of the year and take advantage of any weakness to establish or add to positions in our two recommendation funds.
Global X Nasdaq China Technology (QQQC) rates a buy up to $25 per share, and Global X China Financials (CHIX), which rates a buy up to $15 per share. These exchange-traded funds offer one-stop exposure to our two favorite sectors in China: financials and information technology.
We also continue to like Ctrip.com International (CTRP), China's largest online travel platform. Strong ticket sales fueled solid second-quarter revenue growth for the company.
Management's guidance calls for third-quarter net sales to grow between 70 and 75 percent year over year, with much of this upside coming from ticketing.
Management has a track record of making strategic acquisitions that unlock additional value for the Ctrip.com International; don't expect the company to deviate from this path.
The stock may pull back in the short-term because of gyrations in the broader market, but the company's long-term growth story remains intact. The shares rate a buy up to $50.
By Yiannis Mostrous, Editor of Capitalist Times