Investment Solutions Forum 2019 HK - Exclusive Insights - Donald Amstad - 3

Donald Amstad of abrdn

Sep 23, 2019

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1. What’s the biggest opportunity in equities globally today?

Video transcript

1. What’s the biggest opportunity in equities globally today?

We think that the biggest and best opportunity in equities globally today is the China A Share Market. It's the second biggest stock market in the world. It's dominated by retail investors and the market is, therefore, big, very liquid and very inefficient. What's happening in China is this switch away from quantity of growth and of financial assets to quality of growth and financial assets. The problem that China has is that they don't have a credit culture. They don't have an equity culture. What they need is to import it, and what they've done therefore is opened the doors to this enormous domestic capital market that's been closed to us for the last 40 years. Now, the price they're paying in opening their market up is that houses like Aberdeen Standard Investments and our friendly competitors can go in and we can buy the crown jewels of the Chinese financial system at bargain basement prices, because Chinese investors don't understand what quality is and we do. We are quality investors. Now, when Chinese people go shopping on the streets of Paris and New York and Hong Kong, you see them ladened down with shopping bags from the finest boutiques, with the finest shoes, the finest handbags, the finest watches, the finest red wines. When they invest, they don't yet understand what is financial quality. Now they're smart people, we all know that. And when they learn what is financial quality, quality stocks in China will become expensive, just like everything else they buy.

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