Fa Xian Xian Ji CIO Harvey Lee shares his thoughts and analysis regarding the current stock market outlook as well as the company’s future development plans
What are your views on the current Chinese stock market situation?
Based on my analysis of the Chinese markets, China remains an attractive investment option for foreign capital seeking long term capital growth opportunities. While short-term volatility may be high, foreign investors are likely to continue adding China A-Shares to their portfolios, due to the general acceptance that China’s economy is stable and healthy even in this situation.
How has the Covid-19 pandemic affected China’s stock markets?
The pandemic has taken everyone by surprise really, especially for the Chinese stock markets that were riding on record two-year highs before the pandemic struck. After the initial shock, the market has stabilized significantly and is performing reasonably well. Now remember, before Covid-19 happened, investments in China was probably one of the most attractive options around and that hasn’t changed. The country is still in a fantastic financial position and we are witnessing only a temporary situation. Once the global economy restarts, China’s stock markets are likely to rebound quickly and finish 2020 strongly.
I have significant hopes for the A-Shares market, due to three core aspects: First, the second half of 2020 will see the implementation of domestic expansion policies in an attempt to revive the ailing economy. Interest rates and taxes are likely to fall, with more liberal loans given out. This may lead to increased market risk appetite and corporate profits for companies in the right areas. This makes it conducive for the recovery of the A-Shares market. Foreign investments are likely to continue pouring into China for the next 1-2 years due to this loose liquidity and structural investment opportunities that lie within A-Shares.
Given your confidence in the Chinese stock market, what are the future development plans for Fa Xian Xian Ji?
I’m really excited to be able to share with everyone our company’s five-year development plan. The broad vision is to expand our operations and revenue streams to create value for our shareholders and investors.
First and foremost, the aim is to unlock the full potential of Fa Xian Xian Ji Predictive Analytics, by increasing our international footprint organically and giving it a global platform for investment opportunities.
The key concept is to expand beyond China, beyond Asia and firmly establish the company as a global financial powerhouse.
Currently, we have 8 investors relations offices in various parts of China, including major cities like Chengdu, Beijing, Zhengzhou, etc. Our new headquarters in Beijing will be ready by July as well. Going forward we will be expanding across the entire China so we can deliver the highest quality investment services for our investors. We estimate to have over 20 investor relations offices by 2021.
Beyond China, Beyond Asia sounds fascinating. Can you elaborate on that?
We have adopted a three-pronged approached towards globalization. In Asia, we intend to diversify our product range and set up regional offices across Asia, with Beijing being the headquarters for the region. That is the first step.
Next, we intend to acquire investment advisories and brokerages in places like Korea, Japan where they have strong financial infrastructure in place. Eventually we want to expand our private wealth and asset management division in Asia and provide more than just financial solutions for the region. We are also looking to set up a Financial Center in the future, with the aim of nurturing the next generation of financial professionals, as well as educating the public on financial planning and its related risks. It will be a huge undertaking that we are very excited about!
What about Beyond Asia?
Well the evolving structure of European accounting standards will create many commercial opportunities. Market share is up for grabs as large financial institutes reposition themselves during the global crisis. We believe that there will be significant merger and acquisition opportunities arising in the coming years and our vision is to be a part of that.
Setting up our global headquarters would be key towards achieving that. We have plans for expansion in the US and the UK, which will be crucial for our R&D efforts as well. The end game would be to fully assimilate our Predictive Analytics with the global markets, which will significantly boost our operations.
Thank you for your wonderful insights. Any final words for the readers?
Given the market conditions, it can be daunting for investors to navigate the treacherous path ahead, especially for retail investors. My advice is leave investments to the professionals, especially if you have no idea what you are doing. Financial institutes, like ourselves, have the financial clout and experience in dealing with crisis situations and are largely unaffected by short term turbulent events. I hope that this will be over soon and everyone can remain safe and healthy in the meanwhile.
Thanks to Harvey Lee of Fa Xian Xian Ji, for taking his time out to answer our questions. We hope that the readers will have learned much about investments during this time of crisis and the opportunities that lie ahead in the coming months. We are excited to learn more about Fa Xian Xian Ji’s development in the future.
Company Profile
Fa Xian Xian Ji (Beijing) Investments Co. Ltd. was established in 2016. The company’s business scope includes investment management, investment consultancy and investment technology development. Fa Xian Xian Ji relies on strong investment research capabilities, research and development of proprietary quantitative investment models, designed specifically for the Chinese A-Shares market. Our clients include institutional investors, high net worth individuals as well as accredited investors, to whom we provide personalized portfolio management and professional investment advisory services.
Competitive Advantage
Fa Xian Xian Ji uses the most diversified and decentralized investment strategies, drawing on our technological advantages and investment analytical capabilities, to create a suitable quantitative trading model for the Chinese stock market. We use advanced technologies to power complex algorithms that are designed to predict market movements ahead of others, as well as AI optimized portfolio and trading strategies that ensure safe and highly liquid investments. We are committed to provide the best investment solutions to institutional and retail clients globally.
Built and designed for China’s stock markets
Fa Xian Xian Ji’s unique trading algorithms are developed specifically for the Chinese stock market. They analyse price indicators at the company, industry, and macro levels, and conduct value selection based on the company and industry level indicators. On this basis, industry optimization and category optimization are carried out according to investors’ risk profile and adjusted accordingly to strive to achieve short, medium and long-term absolute return investment goals.