Axa's Thompson invests in Chinese telecoms and property
The £150.2m Axa Framlington Emerging Markets fund has added two Chinese stocks in anticipation of mobile telecommunication expansion and easing property restrictions.
Fund manager Julian Thompson started positions in China Mobile, the country’s largest mobile telecoms provider, and property developer Longfor during June.
“We expect China Mobile’s operating performance to improve as more 3G handsets become available for its locally developed network and the implementation of 4G moves closer,” the managers writes in the fund’s July factsheet.
The company’s latest figures show it had just over 67m 3G customers as of June 30, which is an increase on the 51.2m 3G customers it had at the start of the year. The provider also plans to establish 200,0004G base stations by the end of the year before the government starts issuing 4G licences.
Commenting on the Longfor purchase, Thompson says: “A gradual easing of restrictions on the [property] sector is leading to better sales, which should also benefit from further monetary easing.”
China implemented two years of curbs on its property market in a bid to bring down prices from elevated levels. However, it starts to ease these as the economy slowed down and recently enacted cuts to its ket interest rates.
At the end of June, Longfor bought a 529,900 sq m of land in the southern city of Xiamen for Rmb 1.74bn. It hopes to develop the sites into residential and commercial projects.
During June, Thompson also took profit on Chinese online game developer Netease.
Asia is the fund’s largest geographical allocation, accounting for 47.25 per cent of the portfolio. This is up from the 43.49 per cent seen at the start of the year and includes names such as Samsung Electronics, Taiwan Semiconductor Manufacturing and China Shenhua Energy.
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