Originally published October 24th 2022
The Blind Squirrel is a big fan of, and a subscriber to, Bill Blain’s Morning Porridge newsletter. In last Thursday’s piece, he was musing on the investability of Chinese equities. Frankly, we are not sure which side of this debate we sit on and there are probably more interesting themes to worry about. There are no Chinese equities in the portfolio, and our energy and metals investments give us more than enough exposure to China re-joining the world post Covid. Frankly, we were about to move on when we read “There is a holding company which owns a massive slice of one of these Mega Stocks (70% of its’ base) ….invest in it by proxy through the Dutch firm’s deeply discounted Net Asset Value (NAV) of -42%.” ! That old Scottish tease did not name names, but we knew immediately that he was talking about the Prosus (PRX) (ex-Naspers)’ stake in Tencent2. It gets better. PRX has a half decent option chain on Eurex. Perhaps Chinese equities need not stay …