Top Manager Martin Gilbert: China, India Will Become Asset Management Powerhouses
Standard Life Aberdeen Vice-Chairman Martin Gilbert projected that China and India will become "real powerhouses" for the asset management industry.
Mr. Gilbert said during his speech to CNBC at the first Financial Sector Conference in Riyadh, Saudi Arabia that Asia remains the key focus for asset management arm Aberdeen Standard Investments (ASI) due to its growth in retail investors and wealth in China and India.
Mr. Gilbert said that it's not really a retail market yet but when it is, China, India, these sorts of places are going to be real powerhouses for the asset management industry. The Asian investment team of ASI was expanded in November 2018. Four of its portfolio managers joined Shanghai and Hong Kong as it operates its China fixed income and equities expertise.
According to Mr. Gilbert, the economy and political structure of China meant that investors need to be close to the government in China and as far away from the government as possible in India.
China's economic growth in the first quarter of 2019 exceeded expectations as it reaches 6.4 percent. The leading banking giants in the country including Citi, Barclays, and ING are expected to grow this year. Analysts, however, warned that it is still too early to withdraw stimulus measures that they have implemented to strengthen growth. China's economy continued at a steady growth despite the trade war with the United States.
Citi raised its annual forecasts of China's GDP to 6.6 percent from 6.2percent as they cite optimistic outlook for a United States-China trade deal and stronger domestic demand in China. Economists at the United States bank said on a note that their new baseline scenario is that a framework trade deal between the U.S. and China will be reached in (the second quarter) and it will lift most, if not all, existing punitive tariffs. Iris Pang, ING's Greater China economist said that they think that the trend could continue for the rest of the year.
However, Gilbert assured that ASI is growing strongly in China, particularly in the A-share market. A-shares refer to stocks of Chinese firms that are incorporated in China and that were listed in Shanghai and Shenzhen. A-shares became available to global investors in 2014 and 2016 through the "connect" programs. A-shares were included in leading mainstream indexes in 2018.
Gilbert said that it has opened up a whole new set of opportunities of well-managed companies, a bit like India, which does have some very well managed companies.