Tony Sagami takes a closer look at three lucrative trends that he found prominent in the Chinese market place. Mr. Sagami discusses the three trends in depth.
Sagami just returned from China and it was a very informative trip. During his trip he spoke with not only with the corporate bosses, but the local business men. In many ways, he learned more from regular, everyday Chinese people on the frontlines than CEOs. Here are three potentially lucrative trends he witnessed firsthand on the streets of China.
The first trend is a different type of oil. Oil prices have been dominating the headlines but the average Chinese consumer isn't that concerned about the high price of gasoline since most people in China ride bikes or use public transportation. However, the Chinese do care deeply about cooking oil, the price of which has skyrocketed along with other food products. The latest inflation data for China showed that while overall consumer prices increased by 8.5%, food prices climbed by a whopping 22.1% over the last 12 months. Food inflation is a heck of a lot more important than energy inflation in developing countries because the working class has to spend a disproportionate amount of their income on food.
The second trend is the number of Australians visiting China has exploded. Sagami was amazed at how many Australians he’d seen comparatively to previous trips to China. He also found that many of them were employed in or somehow benefiting from high commodity prices. Australia is one of the richest natural resource countries in the world and the huge demand for those resources from China has enriched Australia.
“The third and final trend is the booming restaurant business. China has four million full-service restaurants, seven times as many as the U.S. And China's 1.4 billion people spent more than 1 trillion yuan (U.S. $126 billion) dining out last year, a 13% increase from 2006 according to the Chinese Ministry of Commerce. Over the last 15 years, restaurant sales have increased by more than 10% a year. KFC is the largest U.S. restaurant chain, owned by Yum! Brands, which currently has more than 900 quick-service restaurants,”
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About TONY SAGAMI & MONEY AND MARKETS
Tony Sagami, a veteran investment advisor and a leading expert on Asian markets, is the owner and founder of Harvest Advisors, an investment research and money management company. Mr. Sagami has been managing money for more than 20 years and is one of the early pioneers in the application of technical and quantitative analysis to mutual funds and stocks. He is a featured contributor to Weiss Research’s daily e-letter, Money and Markets and monthly Safe Money Report as well as the editor of Asia Stock Alert.
Prior to establishing his own firm, Mr. Sagami was managing director at W.E. Donoghue & Co, serving additionally as the director of investment. During his successful career, he also held the position of account executive at Merrill Lynch.
Mr. Sagami’s views on Asian markets, specifically Chinese investments, have been featured in publications such as The Wall Street Journal, Barron’s, Kiplinger’s, Smart Money, Business Week, New York Times, Washington Post, Investors Business Daily, Bloomberg, Financial Planning Times, Mutual FundsMagazine, Chicago Tribune, and the LA Times, as well as on CNBC and CNBC Asia.
Mr. Sagami holds a degree in economics from the University of Washington.
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