Investment Insight Opportunities Ahead_Opportunities的意思

发布时间:2020-03-26 来源: 历史回眸 点击:

  Over the next five years, China will be shifting its focus to more balanced development and what it sees as quality growth. Its two main strategies are promoting innovation--with the government-backed industrial upgrading--and strengthening the rural economy. This shift will lead to massive investment and fresh, wealth-making opportunities. In the stock market, innovative enterprises will see new growth prospects. Agricultural concept stocks, companies in energy conservation and some cyclical stocks stand to gain with the help of government assistance.
  Here are the points of views of three experts on investment opportunities in different sectors:
  
  Stock Market
  
  He Qiang (professor with the School of Finance of the Central University of Finance and Economics): China’s stock markets have been surprisingly counter-cyclical.
  When the economy is strong, they have lost ground. If that pattern continues in the near future, it will actually provide some very attractive investment opportunities.
  Moves to liberalize certain policies will bring fresh opportunities. If there are some changes in macro-economic controls this could be very significant for market development.
  While I do expect some impact from the implementation of new policies (such as the reform of state shareholdings) these measures will have only a temporary effect. There may be some downward adjustment but it won’t be a repeat of the broad market retreat that we saw in 2005.
  In some respects this is healthy because you don’t want a stock market that just keeps going higher. That is unsustainable. A healthy pause now and then allows more funds to enter the market and build a base for future advances.
  There are some opportunities in the agricultural sector, but the track record of listed agricultural companies must be improved. If they can’t boost their fundamentals they will be nothing more than tools for speculative trading.
  New forms of energy are another promising area but so far they are largely in the “concept” stage. Without concrete results this won’t be suitable for investment. Technical hurdles need to be overcome while commercialization in many cases is still not quite there.
  Digital TV, 3G-mobile phones and the next generation of Internet technology all will provide investment opportunities. The so-called 3G or third generation mobile phone technology is already with us but it needs to be fully endorsed by the marketplace. Costs still need to be addressed and we still need reasonable applications that make economic sense. Games for mobile phones have bright prospects. These sectors have a broad and reliable market base. Text messaging and games are certainly a direction for future development.
  
  Industry
  
  Gao Huiqing (Director of the Strategic Planning Division of the Development Research Department of the State Information Center): The 11th Five-Year Plan will have an impact well in the future. The government will be setting standards in a number of areas. In housing, for example, developers will have to provide smaller apartment units for people with smaller budgets, and not just focus on the luxury end of the market. Factories will have to cope with stricter standards for dealing with sewage, and heavily polluting industries, like iron and steel, will need to meet higher emission standards. Clean energy will play a greater role in our daily lives, while refuse will have to be disposed of in a fashion less harmful to the environment.
  Meanwhile, the construction sector will also face new requirements for more energy-saving materials. This will have an enormous impact on a number of other areas. Companies that save energy--just like those that protect the environment--will see new demand for their products or technology.
  Over the medium term, the stock market will also create a favorable environment for investors. Natural gas stocks, for example, are now priced low but have solid prospects. Since the second half of last year, the reform of prices for the nation’s natural resources has gained widespread attention. The National Development and Reform Commission raised the price of natural gas at the end of 2005, and future prices of clean energy can be expected to rise further. These price hikes have helped the companies and the stock market. Over the next three to five years, the energy sector will be a focus of investment.
  On the other hand, industries that are heavy consumers of energy will see their costs rise. Iron and steel is one sector that will have to pay higher costs to protect or replace our natural resources. If enterprises do not reach a sufficiently large scale, they may be unable to compete. That in turn will make mergers inevitable.
  In manufacturing, consolidations will be more frequent. Manufacturers that rely on low cost energy will see their profit margins shrink. Companies with technology or equipment in the environmental protection field will see their markets expand considerably. At the same time, new forms of energy, such as solar power, will see growing demand. In the United States, the biggest IPO by a Chinese privately owned company was by the Wuxi-based Suntech Power Holdings Co. Ltd. (NY: STP), which made its name in new energy sources.
  
  Enterprise
  
  Wang Yukun (Director of the Enterprise Department of the Capital Steel Development Research Institute): In 2005, Chinese companies made significant strides in globalization. But China’s advances have had some unwanted side effects. If a company is said to be of interest to China, speculators move in quickly. That raises the value of the assets and ultimately increases the cost to China.
  I believe that globalization does not have to be achieved only through mergers and acquisitions. Last year there were only a handful of Chinese companies that actually succeeded in using this method. China National Petroleum Corp. was one exception and it succeeded because it held to a core value of “letting others benefit from one’s own development.”
  This is a lesson for other companies. By sharing the benefits with others, we take an indirect path. If we look at Huawei Technologies, they are clearly using this formula. They have formed strategic alliances with Nokia, Ericsson, Siemens, Cisco, GE, Microsoft, IBM, Sony, Alcatel and 3Com. We could call this “borrowing a boat to go to sea.” This indirect path strategy allows Huawei to make the most of the strengths of its partners. And in turn its customers become aware of the Huawei brand.
  
  (Xinhua Finance)

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