TheEdge
KUALA LUMPUR: ING Investment Management Asia Pacific (Hong Kong) Ltd expects its ING China Access Fund to generate 26% in annual earnings growth over the next three years.
Its senior investment manager Michael Chiu said the 26% growth was sustainable going forward due to China’s real and nominal gross domestic product (GDP) growth of 9% and 14% respectively.
“Earnings growth is a key driver for the rise in share price in the long term and we expect double-digit growth in the share price,” he said after the launch of the new fund.
The new fund has an approved fund size of 600 million units and was offered for sale until Jan 31, with a 50 sen per unit entry price and a minimum initial investment of RM5,000.
ING China Access would invest a minimum of 95% in the fund which offers investors access to premier Chinese companies not listed on China’s A-share market, as well as good quality China initial public offerings (IPOs) listed on international markets.
ING Investment Management Asia Pacific (Hong Kong) is the investment manager for the ING China Access Fund.
Chiu said strong earnings and economic growth as well as the listing of more world-class Chinese companies on Shanghai’s A-share market helped lower the overall valuation, although the market’s 2008 price earnings (PE) ratio of 31.2 times might be excessive.
He said the current high valuation for China’s A-share market was due to demand and supply factors, high savings rate and the lack of alternative investment vehicles.
Chiu said domestic sectors like consumption, real estate and infrastructure would benefit from the appreciation in the renminbi, which ING believed would continue over the next five to 10 years.
“We believe these (sectors) will be the major investment theme in 2008, and the property and infrastructure sectors are going to prosper as well,” he said.
ING Funds Bhd chief executive officer Steve Ong said the fund offered reasonably safe access to the Chinese market because ING Hong Kong would pick companies trading at a discount or with reasonable price valuations.
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