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Abney Associates Increased Share Holdings And Confidence For Chinese Companies

Jul. 11, 2013 2:06 AM ET
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Seeking Alpha Analyst Since 2013

Abney Associates advising investors on positive outlook for bargain good quality share holdings within China as the country hits six-month low.

June 24, 2013 - "Chinese shares hit their lowest point in a six-month period last week over concerns of poor economic data and a withdrawal of equity in emerging markets leading way to the world's second largest economy suffering a liquidity drain of $835 million from stock funds primarily held in Chinese holdings. On a positive note, this gave rise to an increase of bargain priced investment holdings in well-established quality companies within China driven by a constructive macroeconomic and earnings outlook," said Richard Hunter Director of Private Equity from Abney Associates.

Companies are now looking at their future holdings and re-investing within their own corporations buying back shares at the low prices, portrayed as a positive signal that companies despite the downturn in share value have the confidence in their future growth. Last week the company's controlling shareholder through its wholly owned subsidiary acquired 1.13 million shares in Shanxi Coal International Energy Group Co Ltd and at the start of the second quarter 19.38 million shares in Zoomlion Heavy Industry Science And Technology Co Ltd were acquired by senior management.

Zoomlion suffered a 68.7 percent decline in performance in the first quarter of this year with a steady drop in share value since February, due to a decline in the construction machinery industry and weak market demand. A statement made by the company's executive team at the start of June implied that the decision to increase holdings was derived on the company's sustainability and confidence steady growth with contracts in the future.

"Overweight positions in equities are helping to stabalise share prices, in the month of June 32 companies were recorded to be in this position, instilling more confidence in the Chinese economy for clients and investors," added another Analyst at Abney Associates.

The Chinese economy had the lowest growth recorded for 13 years in 2012 with a growth rate of 7.8 percent. The Chinese government has set this year's growth rate at 7.5 percent, a positive sign that the country is more driven by achieving quality growth and consumption, relying less on exports and investment with authorities being more tolerant to slower growth better opportunities arise for outside influences.

"A growth rate of 7.5 percent is not a bad thing, we are now able to take advantage of the lower share prices, concentrating on good sound well informed investments in quality companies that will make excellent returns in the years ahead for our clients," said Richard Hunter Director of Private Equity from Abney Associates.

Abney Associates are a Hong Kong based company that provides a range of financial services to individual clients, portfolio companies, corporate investors and entrepreneurs who wish to take unbiased financial advice.

Abney Associates are primarily a team of financial specialists who pride themselves on having a high level of expertise and vast experience for diligently monitoring any positive or negative developments to companies currently listed on exchanges globally, especially those that may affect client investment interests. This is done in order to ensure the financial advice given is factually correct and delivered in an effective way.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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