China’s regulative crackdown on tech might last years, however that’s not most likely to hinder long-lasting financiers from putting cash in them, anticipates GFM Asset Management’s Tariq Dennison.
“If you ask me I’d say, give it at least another 20 or 30 years,” Dennison informed CNBC’s “Squawk Box Asia” on Monday when asked just how much longer the months-long crackdown might last.
“All this has happened in stages – look how far tech regulation has come in just the past 30 years,” the wealth supervisor stated. “These things may look like they happen in steps, but there’re many, many steps over a very, very long road.”
Still, he does not anticipate long-lasting financiers to be prevented by the unpredictable regulative outlook.
“I would say right now, patient capital is actually buying more and more shares of Baidu, Alibaba, Tencent and JD because they’re looking at the long-term prospects,” Dennison stated. Patient capital usually describes financial investments that have a longer time horizon and are less speculative in nature.
“These tech companies are the babies that’ve been thrown out with the property bathwater, the babies that’ve been thrown out with the regulatory bathwater,” he included.
Dennison stated China’s tech giants might really stand to gain from any brand-new legislation.
“If you ask me, newer regulations are more likely to entrench these companies and to give them wider moats because Tencent is very, very likely to be able to adapt to any of these new rules, to find new ways to make money. And they have lots and lots of consumers to serve in a common prosperity model,” he stated, describing Chinese President Xi Jinping’s objective of spreading out wealth.
“I often say, if you want a bull case interpretation of common prosperity, it’s basically trying to prevent a large gap from the haves and the have-nots, and ensure that the large consumer middle class, that they too will purchase services that the Baidu, the JD, the Alibaba are providing,” Dennison stated.
— CNBC’s Arjun Kharpal added to this report.
