Against ongoing trade disputes and uncertainties in the global economy, investment opportunities are still abundant in the Asian market, especially in China, said experts at the China Investment Corporation Forum 2019 held in Shanghai on Thursday.
Joseph Y. Bae, co-president of private equity firm KKR, said that inflation and the impact of technology are the two greatest challenges that most chief investment officers will have to address in the near future, according to the company’s latest findings. Instead of trade tensions inflicting various parts of the world, the biggest risk at present, as most CIOs understand, is rising populism in the domestic market, he added.
Regarding this, Bae said KKR remains optimistic on the investment outlook in Asia. Investment return will be better in the emerging markets, especially in China, he said.
For one thing, corporate government will be improved, which will drive the growth of companies, especially conglomerates. Also, technology advancement will be another impetus. The demographic change and rise of the middle class will indicate great potential in the consumption sector, explained Bae.
Therefore, food safety, environmental protection and healthcare will be KKR’s focus on investment in China, he added.
Glenn Youngkin, co-CEO of The Carlyle Group, said the current investment environment is “not bad, but complex and challenging”.
But still there will be plenty of investment opportunities in China driven by digitalization, innovation and rising income, Youngkin said. Therefore, consumer and retail, healthcare, especially health technology, financial services and insurance, and the global energy industry are the sectors likely to promise higher returns, he said.
Meanwhile, Youngkin said that they will target companies undertaking fundamental business improvement in China. In addition, market disruptors with high growth, and global industry leaders with resilient growth also will be their investment targets in the country.
Adebayo O. Ogunlesi, chairman and managing partner of Global Infrastructure Partners, added that infrastructure is one of the ideal investment targets at a time of uncertainties, since it can offset inflation and create opportunities with active returns.