Report by CHA-AM Advisors

Now is not the time to be buying developers and other property plays, according to David Scott. 1) Chinese property developers have never generated any meaningful FCF. 2) David heard the same story in Japan / Thailand following their property busts. The boom never returned and never will. 3) The more government involvement in an industry, the worse the returns are for the minority shareholders. 4) In a country of enormous numbers the amounts being talked about are too small. In this week’s edition of David's ‘A Strategist’s Diary’, he also outlines the key characteristics of a GCGB (Great China Growth Business) focusing on 3 stocks: Midea, Kweichow Moutai and Sungrow Power Supply.

Industrials

Report by Copley Fund Research

After a multi-year decline, active Asia Ex-Japan fund managers are growing increasingly bullish on the Industrials sector. It is now the 5th most widely held sector, but average weights are fraction of the dominant quartet of IT, Financials, Consumer Discretionary and Communication Services. Steven Copley highlights seven companies likely to feature in the investment decisions of fund managers in the region should the rotation into Industrials continue. These include NARI Technology, Sungrow Power Supply, Voltas, Country Garden Services and CK Hutchison.