Australian investors should shift focus to China's domestic market growth
Australian investors' focus on local multi-nationals as a means of accessing overseas growth in Asia means they are missing out on the rise of domestic Asian businesses that are growing faster than multi-nationals, according to Fidelity International.
"We are seeing the emergence of some national brand champions in sporting goods and in fashion," said portfolio manager at Fidelity International, David Urquhart. "These companies have an increasingly strong position in their home market, which delivers enormous growth potential. There is also the possibility they will gain a presence in the global marketplace - it is all ahead of them."
As an example, Urquhart mentioned Chinese Olympian Li Ning's sportswear company, which is the leading sportswear retailer by sales volume and number three in the athletic market by sales.
"It has nationwide sale coverage and is benefiting from changing lifestyle, robust domestic consumption and high growth levels," he said.
He added that there are also attractive investment opportunities in infrastructure.
"The majority of government stimulus has been focused on infrastructure development," said Urquhart.
"The vast sum of money being channelled into the development of Asia's infrastructure is good news for the outlook for the region and its equity markets. Some 3.8 billion people will benefit from planned urbanisation, whether it is better transport links or the creation of new jobs. In return, the region will see the rise of the consumer and growth of the middle class - and increased domestic demand.
"Overall, the outlook for the Asian region continues to be strong, with South East Asia and China showing the strongest buying opportunities for investors over the longer term and leading the recovery phase.
"GDP growth for developing Asia is set to reach over 6 per cent next year, which is more than double that expected in the Western hemisphere."
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