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Sydney, Aus, June 15, 2009 - (ACN Newswire) - While the down turn in the economy represents challenges for some, it is not the case for those cash rich investors who are looking for investment opportunities at a discounted price. It is evident that many Chinese companies are buying into Australia resource sector at an unprecedented rate recently. In reality, many miners are suffering through the global financial crisis and are happy to accept this funding to ensure their corporate health and sustainability.
In an interview with Eugene Yao from ACN Newswire, Mr Raymond Chan (Head of Asian Desk at ABN AMRO Morgans) gave us some fresh insights and first hand information on today's market.
To keep pace with the industrial and commercial development, as well as the new demands placed on urban infrastructure, China's demand for overseas raw material supply is increasing. World Steel Dynamics also commented the tight iron ore markets had put pressure on Chinese steel companies to "explore alternative ways to secure appropriate supplies" by buying into projects outside of China.
Australia, as a country with abundance of resources and close geographical proximity to China, attracts many Chinese companies to source the lifeblood of production - resources. For example, some of the most talked about deals includes;
- Fortescue Metals Group (ASX:FMG) joint venture with Baosteel (SHA:600019)
- Minmetals (HKG:1208) bid for Oz Minerals (ASX:OZL)
- Chinalco (SHA:601600, HKG:2600) bid for Rio Tinto (ASX:RIO)
- Guangdong Rising Asset Management strategic investment Pan Aust Limited (ASX:PNA)
However, Raymond also pointed out that China makes up just 0.4% of inward foreign investment in Australia currently and he believes that China investment in Australia will continue to rise. As one of Australia's key trading partners already, it is only natural for China to seek out investment here, just as the Japanese, American, South African, British and Canadian have done in past cycles.
Raymond also suggested that the world economy is in favor for the Australian miners in the long run. As the US recession deepens, the only way for the US to ride out of the recession is by raising the commodity prices on their exports. It is expected that the increase in world commodity prices will give Australian miners a greater profit margin.
Both the Australian and Chinese governments also play supportive roles in the Australia China relationship. Whereas, Australia needs inward foreign investment to support the economy, on the other hand, China needs an outlet for their money to counteract with the rising RMB pressure.
Mining, as Australia major source of income in export, will continue to do well.
ABN AMRO Morgans was Lead Manager and Underwriter to an AUD $143 m equity raising by Pan Aust Limited (ASX: PNA). Pan Aust also raised an additional AUD $180 m from Guangdong Rising Assets Management ("GRAM"). Under the agreement, GRAM will serve as a cornerstone investor for PNA and a strategic alliance to support PanAust's future growth initiatives in Asia. Raymond believes ABN AMRO Morgans will continue to play an important role in facilitating more transactions between the two countries.
About Mr Raymond Chan
Mr Raymond Chan is a JP, qualified Certified Practising Accountant (CPA) and Certified Financial Planner (CFP), CPA Financial Planning Specialist (FPS). Mr. Chan holds a Master Degree in Commerce (Funds Management) with Distinction average and Bachelor Degree in Accounting and Finance from the University of New South Wales. Currently, he is employed by ABN AMRO Morgans as Head of Asian Desk and his desk is managing in excess of A$225 million client assets. Prior to the current position, Mr Chan worked with Merrill Lynch and HSBC Securities.
Mr Chan has successfully developed a dynamic business model, servicing retail and corporate clients in financial planning and stock broking. He has established very strong relationships with a number of listed companies in Australia, Hong Kong, Singapore and Malaysia. Mr Chan is often invited to provide commentary for Australian leading media such as SBS Radio, i-Cable HK, Sydney Morning Herald, The Age, Sunday Telegraph, Herald Sun, The Australian, TVB Jade and 2CR Radio Network.
Contact:
Raymond Chan
Tel: +61-2-8215-5033
Fax: +61-2-9258-8033
Email: rchan@abnamromorgans.com.au
Topic: Business Plan
Source: ABN AMRO Morgans
Sectors: Daily Finance
https://www.acnnewswire.com
From the Asia Corporate News Network
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