Hong Kong Stocks a Good Way to Play China: Fund Manager

Play China’s growth story via Hong Kong companies and buy Indian stocks only for the long term, advised Hugh Young, managing director at Aberdeen Asset Management.

“In a broader sense, there are plenty of companies in Hong Kong benefiting from the growth of China, “ he said on CNBC’s Protect Your Wealth.

“Typically, that’s where we find higher comfort levels with management that we've known over a few decades. (We've) seen how they acted during crises and how well they looked after their shareholders,” he added.

Swire Pacific and Wing Hang Bank ranked among his choice picks in Hong Kong. Young also cited Hung Lung Properties as a good buy, although “admittedly, that has had a good run.”

For investors eyeing mainland stocks, Young said Petrochina, CNOOC and China Mobile looked fairly decent.

In contrast, he saw Indian equities as a bet for the long-term. “I would probably hold off buying into India because it has had such a good run. If you can close your eyes and look ahead five years, I wouldn’t worry about buying now.”

Young singled out HDFC bank and IT services firm Infosys, saying that despite their fairly rich price earning multiples, up in high-20s on prospective earnings, he would "tuck them away for the future without great concern.”

Young, on his preference for Indian stocks over China’s, explained that Aberdeen's investments in India tended to be well-run, private sector firms with strong growth prospects, while the future of major Chinese companies lay "very much in state hands.”

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