Mark Headley: Asian Giants at a Turning Point?

March 22, 2013

China, which was struggling to fend off an economic hard landing just last year, has recovered. Japan, which has been stuck in a twenty-plus year trap of deflation and stagnant growth has a new Prime Minister who is determined to stimulate inflation and growth. Both nations have seen their stock markets rally in recent months after an extended period of underperformance for China and several decades of terrible performance for Japan. On WEALTHTRACK Premium this week we are exploring the investment potential in China and Japan with a true Asian market pro.

Mark Headley is Chairman of the Board of Directors of Matthews International Capital Management and a Portfolio Manager of the firm’s Pacific Tiger strategy, which includes Matthews Pacific Tiger Fund which Headley ran successfully for over a decade. Both he and Matthews are pioneers in Asian investing, Matthews as a mutual fund firm and Mark as a portfolio manager.

WebEXTRA: Great Investor Mark Headley: “You Learn From Your Losses”

[bliptv id=”iIdDg5CWFQA”] WEALTHTRACK Episode #939; Originally Broadcast on March 22, 2013

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Mark Headley

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Guest Info

Mark Headley

Chairman, Board of Directors,
Matthews International Capital Management
Portfolio Manager, Matthews Pacific Tiger Fund

Newsletter

Consuelo MackWhat will be the big financial game changers of 2013? Early in the year on WEALTHTRACK, Financial Thought Leader Ed Hyman, Wall Street’s number one ranked economist for three plus decades, and Great Investor Dennis Stattman, who runs the formidable BlackRock Global Allocation Fund, both agreed that China and Japan could be the year’s big positive surprises. China, which was struggling to fend off an economic hard landing just last year, has recovered and Japan, which has been stuck in a twenty plus year trap of deflation and stagnant growth, has a new prime minister who is determined to stimulate inflation and growth. Both nations have seen their stock markets rally in recent months. For China, it’s been in fits and starts after an extended period of underperformance. For Japan, it’s been an impressive climb after several decades of terrible performance.

This week on WEALTHTRACK, we decided to delve deeper into the China and Japan “renaissance” theory with a Great investor who is a true Asia pro. Our guest is Mark Headley, Chairman of the Board of Directors of Matthews International Capital Management and a Portfolio Manager of the firm’s Pacific Tiger strategy, which includes Matthews Pacific Tiger Fund which Headley ran successfully for over a decade. Both he and Matthews are pioneers in Asian investing: Matthews as a mutual fund firm and Mark as a portfolio manager. He was an original member of the team that launched the first SEC-registered open-ended Asia ex-Japan fund.

With his more than 20 years of experience in Asia, Headley has seen massive changes in China- some positive, some not- but most transformational for investors. He believes China is now at a turning point and predicts this is going to be the year of China. I’ll begin the interview by asking him why.

In addition to investment insights from Mark, we also asked him about what he is doing in his spare time. You will be able to see his answer in our WEALTHTRACK EXTRA feature, which will be available on our website this weekend.

Happy Spring! Have a great weekend and make the week ahead a profitable and a productive one!

Best regards,

Consuelo
Mathews Asia

Action Point

China’s economy and markets have reached such a level of size, power, diversity and complexity that it deserves to be treated as a distinct asset class, requiring different investment approaches, as investors have had for years in the U.S. market

 

 

One Investment

HEADLEY: INDEPENDENT FINANCE

Ping An Insurance Group ADR (PNGAY)

Price: $15.65 on 3/20/13

52-week range: $13.70 – $18.71

“This is a company called Ping An and it’s based in Shenzhen, right next to Hong Kong. It’s quite independent and really is one of the more entrepreneurial, independent, large financial companies in China. It doesn’t mean the government doesn’t influence it, but it is not the arm of the government or of a ministry. They have always had powerful foreign partners. They have been in place for a long, long time and have built up one of the largest life insurance franchises and now going into banking and asset management. I should know how to say that, and they really have the potential to build a financial conglomerate… and so this is a play on China’s financial system which so many people will tell you today is going to crumble and fall apart, and I have no doubt that there are parts of it that are rotten, but I believe the higher-quality parts actually win in the shakeout.  You know, the Chinese government does need to improve regulation, does need to have better oversight of, say, investment products. The quality companies get hurt by a low-quality environment. So I think as things improve, the really good companies in China have a chance to shine, and it is a real play on the domestic environment in China on a China where the middle class is getting more and more sophisticated, and life insurance and asset management products play right into that.”

– Mark Headley

 

Transcript

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02-18-11
Avoiding the greatest mistakes Americans make when investing internationally. Matthews Asia Fund’s “Great Investor,” Mark Headley on the best way to participate in Asia’s growth.

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