Roach's "RED ALERT": “China is about to unleash the biggest consumer story that the world has ever seen”
Roach is the former chairman of Morgan's china/asia region and considered to be one of the world's foremoist authorities on that region's economy and development. He was interviewed a couple days ago by Fin Review about his brand new book. The interview excerpt below will sound familiar to those reading our views on china since last year.
"As for all the talk of a shadow banking system and a lack of credit growth in China that could dramatically slow down the world’s second largest economy, Mr Roach is not concerned.
“The fears are exaggerated,” he said. “China is going through a critical, once-in-a-20-year transition to a different model of economic growth that will eventually be more balanced and more stable and more sustainable, but most importantly, a more slower-growth model.”
Mr Roach said that as the consumption share of the Chinese economy was set to go from 36 per cent of its gross domestic product to as high as 60 per cent, “China is about to unleash the biggest consumer story that the world has ever seen”.
“Investors need to think services. They need to think the Chinese consumer... growth of the middle class and all of the ancillary characteristics of that from retail trade to wholesale trade, domestic transportation and hospitality and leisure, finance and the big one – healthcare. China has a rapidly ageing Chinese population rapidly in need of a broader array of healthcare choices. These are spectacular opportunities for investors... over the next couple of years.”
Nice huh? MPEL is by far the cheapest stock in the group based on its best in class rev and adj ebitda growth and premium mass focus along with COD Manila opening this year and Macau Studio city opening next year followed by iconic Tower 5 at COD Cotai in 2016, but LVS and WYNN are stupid cheap again now too (we own after buying WYNN and LVS again yesterday). And MPEL just announced today they will be coming with a 10% buyback in addition to their new div policy (30% payout ratio).
He may not be concerned now however give it a couple months when the bills come due en masse....Most people in the US werent worried in 2007 either then the US middle class had to bailout the frauds at the top without our say so.....The Chinese govt has already taken those steps with 4 times the stimulus we pushed in.
China imports alot of their consumer based needs.They arent in the position to continue these Trillion dollar stimulus programs.Food prices have exploded and the air is so thick ya cant breath..
Keep listening to these paid shrills and you will lose all!!!!!
The middle class of China is truly exploding right now. It is lifting all boats there in luxury and services and gambling. Is is one of the highest growing (number) middle class in the world. Guess what. When they have money, they want to spend and they are doing so. Ford is growing, luxury is growing, Fossil is growing, many others in the region. There is opportunity not only in gambling, but in other sectors that this growth can be substantial for certain companies poised to take advantage of this fast rising middle class.