It has been confirmed today, by the Boards of abrdn China Investment Company Limited (ACIC) (formerly Aberdeen Emerging Markets Investment Company Limited) and Aberdeen New Thai Investment Trust, that following the New Thai shareholder vote at today’s second general meeting the proposed scheme of reconstruction and combination of the companies has been approved, concluding with the appointment of the liquidator to New Thai under the scheme. The change of investment policy to one of investing in Chinese equities for ACIC was approved on 26 October 2021. RNS statements from the Companies can be found HERE and HERE respectively. Further information can be found on the abrdn China Investment Company Limited website: www.abrdnchina.co.uk
abrdn China Investment Company Limited Â
The newly formed abrdn China Investment Company Limited will seek to achieve long-term capital growth for shareholders by investing predominantly in Chinese equities. The Company will be managed by Nicholas Yeo and Elizabeth Kwik, alongside the well-resourced and experienced abrdn equity team based in Hong Kong and Shanghai. With over $5billion invested in Chinese equities as at end of September 2021, abrdn has a strong record of performance (both absolute and relative) witnessed in its Aberdeen Standard Luxembourg registered SICAV I China A and All China equity funds. abrdn has been investing in China for almost 30 years, and has a large team based in Shanghai and Hong Kong, supported by team members in Singapore. The Investment Manager also brings a strong record of ESG integration into its investment processes and engagement with investment managers supported by on-desk ESG specialists, together with a very strong track record of investment in China. abrdn’s Chinese equities team of thirteen is complemented by three on-desk ESG specialists and underpinned by a global footprint with its central ESG team of 20+ based in Edinburgh. abrdn is acknowledged as industry leading with an A+ ESG rating from UN PRI.
Why China?Â
China’s equity markets have grown into the second largest financial market in the world (US$17 trillion) after the US. There are more than 5,000 Chinese companies listed onshore in mainland China and offshore, mostly in Hong Kong and the US, presenting vast opportunity. Chinese markets are also becoming large and growing components of major global indices. A big driver of this growth has been the Stock Connect programme, which was launched in 2014. This opened direct trading links connecting Shanghai and Shenzhen with Hong Kong, making A Shares more accessible to institutional investors outside the mainland.
Due to the low correlation of Chinese equities and other asset classes, A Shares provide a great opportunity to diversify portfolio risk and potentially enhance returns. Investing in both the onshore and offshore markets offers an extensive range of opportunities across these markets. More broadly, China’s financial reforms continue to improve the accessibility and liquidity of the domestic market. With more international investors’ participation in the A-share market, it could shine a light on global best practice and help to raise governance standards of local companies over time. Further thoughts can be found at abrdn China Investment Company Limited website: www.abrdnchina.co.uk
The Asian Equities team at abrdn sees tremendous opportunity in China, and abrdn China Investment Company’s portfolio will be well positioned to capitalise on key areas of structural growth. The key investment themes include:
- Aspiration: As incomes increase and living standards improve in China, rising affluence is leading to fast growth in premium, or higher value, goods and services in areas including cosmetics, travel and food and beverage. The consumer story is attractive because boosting domestic spending forms a central component of China’s reform agenda.
- Digital: Growing integration amid the widespread adoption of technology means a bright future for plays on e-commerce, cybersecurity and data centres supporting cloud services.
- Green: Policy makers globally are committing to a greener and lower carbon world and China is expected to have a transformational role to play. Investments in renewable energy, batteries, electric vehicles, related infrastructure, and environmental management all have a bright future. Grid parity will be game-changing.
- Health: Rising disposable incomes are driving demand for healthcare products and services. The opportunity set is diverse. The proposed holdings include a leading hospital, contract research providers and an internet healthcare platform.
- Wealth: Growing prosperity means structural growth for consumer finance, such as wealth management and insurance protection, as well as increasing investor participation on stock exchanges.
The Board Â
The Board of abrdn China Investment Company Limited has announced the appointment of two new directors, Anne Gilding and Sarah MacAulay, with effect from today.
Anne Gilding: Anne is a Non-Executive Director of Momentum Multi-Asset Value Trust plc, a senior adviser to Peregrine Communications, and she has also served a term as a trustee of an educational charity. She has over twenty five years’ experience of developing and leading global communications, branding and marketing solutions for a broad range of companies including Impax Asset Management Group plc, BMO (formerly F&C), GAM, Vernalis Group plc and UBS. Anne was formerly a director of Aberdeen New Thai Investment Trust.
Sarah MacAulay: Sarah is Chairman of Schroder Asia Total Return Investment Company plc and JPMorgan Multi-Asset Growth and Income plc. She is also Senior Independent Director on the board of Fidelity Japan Trust. Previously she was a Director of Baring Asset Management (Asia) Limited in Hong Kong and Asian Investment Manager at Kleinwort Benson and Eagle Star in London. Sarah was formerly a director of Aberdeen New Thai Investment Trust.
