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Mirabaud’s Tubbs: China’s corporates split on whether economy is really improving
by James Phillipps on Mar 08, 2013 at 10:37
Besides domestic consumption, he is also playing the Macau gambling theme through a holding in Sands China, which operates one of the island’s largest casinos. He points to improving infrastructure, such as the high speed rail link in nearby Guangdong, making Macau more accessible.
‘The gaming industry is one of the very few in the world that is supply driven. If you build a new casino, people are intrigued and want to come and visit,’ he says.
The Chinese government’s continued spend on infrastructure is reflected in his holding in China State Construction, which he describes as one of the best ways of participating in the upside from the growing need for affordable housing.
He also has exposure to Hong Kong-listed Yuexiu Property, reflecting his bullishness on the sector.
‘There are only two Western broking houses writing coverage so it is not well known,’ he says. ‘It has strong management and growing its business very rapidly. What makes it different is that it has an investment grade rating by Moody’s, so its cost of funding is much less than its main competitors.
‘It also owns shares in a Hong Kong Reit, which it can sell its new builds to, yet it is trading at a 50% discount to its net asset value and yields 4%.
The Mirabaud Global Emerging Markets, which launched in July last year and is run with a mid to large cap bias, has now passed the $100 million mark with assets of $113 million as of 7 February. Over six months it has returned 11.69% compared to a sector average return of 8.62%.
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After a record year for inflows and market-leading performance in 2012, emerging market debt has taken a large step towards the mainstream. Our recent debate covers the outlook for the asset class this year and where opportunities can be found.
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