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Alternative Market Briefing

Chinese investors lose 30% (A$12bn) from weak Australian dollar

Tuesday, September 08, 2015

Komfie Manalo, Opalesque Asia:

The weak Australian dollar caused Chinese investors to lose some A$12 billion or 30% of the value of their A$40.3 billion investment in that country over the past two years, said David Chin, Managing Director of Basis Point.

Chin said that the investments were made in the 2012 and 2013 financial years mostly in resources. Since that 2012/2013 period, the RMB to AUD rate has dropped from an average of 6.5 in the two-year period to June 2013 to 4.5 currently, a drop of 30%.

He calculated the A$40.3 billion from FIRB (Foreign Investment Review Board) statistics as well as Basis Point’s research on property investments by Chinese permanent residents and temporary visa holders, as well as investments in shares listed on the Australian Stock Exchange (ASX).

However, Chinese investors who purchased approximately A$5.9 billion in off-the-plan apartments in the year to June 2013 are looking at combined currency and property price gains of 40%+ since these apartments are only now being completed where full settlement is required.

From a resources investment point of view, the situation is worse for Chinese investors. Based on FIRB approvals, $18.8 billion was invested in the resource sector in the 2012 and 2013 financial years. During that two-year period, the All Resources index averaged 4356. Today, the index is 2816, equating to a loss of 35% if the index is used as a gauge of ......................

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