Why This Investor Is Still Bullish On Chinese Equities?

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While most analysts and investors have become hugely negative on Chinese stocks in the face of the recent slump in the Chinese markets, O'Leary Financial Group founder, Kevin O'Leary, continues to remain bullish on them.


O'Leary was on CNBC Tuesday to discuss the reasons for his bullishness.


Haven't Sold Any Names


"If you haven't been in Asia for the last 36 months, you have missed the best returns of any indices," O'Leary began. "So, I look at it and say to myself , you always have to be 25 percent in Asia, But you are going to have more volatility. That's the way I am looking at it now. I haven't sold any of my names, I am still there."


It Isn't That Bad


On what his Chinese equity portfolio constitutes of, O'Leary said, "I buy anything with a div. (dividend). So, if I find a company that's over there working, infrastructure has been great until it has lost 30 percent, but you are up 150 (percent)...you are up 150 (percent) down 38 (percent) that's what has happened. Is that so bad?"


O'Leary also made a case for investing in China saying, "That country is going to grow at 3 times the rate of ours, even if it only hits 5.5 percent, the low end of the estimates. How can I not be invested there?"


They Will Behave Better


Although he agreed that Chinese stock market is being manipulated by the Chinese government, O'Leary also highlighted that this "applies to 20 percent of their indices because we can now look with full transparency they have halted 20 percent of their stocks."


"And so, going forward I would think that they are going to behave better because the whole world is looking at this saying, 'we are going to penalize you with this collapse in your market until you tell us you have a) full transparency and b) you will not manipulate by closing stocks."

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Posted In: CNBCMedia
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