• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Markets
  3. / China

3 Ways to Play the Asian Infrastructure Investment Bank

The AIIB is now on the verge of beginning to announce intended projects.
By ROGER ARNOLD Dec 16, 2015 | 04:00 PM EST
Stocks quotes in this article: IGF, IGF, GII, GII, FXI, SNP, CEO, CHA, CHU, HNP, ACH, GSH, HTHT

One of the biggest stories coming out of China earlier this year was the establishment of the Asian Infrastructure Investment Bank (AIIB), which I initially wrote about in the March column, "Asia's New Infrastructure Bank Looms."

That story and what it could mean for companies involved in infrastructure development was, within a few months, overshadowed by the collapse of the Chinese stock market and investors' concentration on immediate concerns vs longer-term potential.

Throughout this year, though, the AIIB has continued the initial phase of organizing members and is now on the verge of beginning to announce intended projects.

In the April column, "Asian Infrastructure Opportunities," I listed 19 securities that I thought would benefit from the bank's operations. As global deflationary forces have been building this year these securities have all declined in price by between 10% and 30%, on average.

Soon the AIIB will begin to announce the initial infrastructure projects it intends on financing. If the bank operates, as Chinese officials have stated, very similar to the fast-track systems for infrastructure development used by them for domestic projects, activity in the infrastructure space should increase rapidly.

The safest way of speculating on this at this point is through the two global infrastructure ETFs I originally wrote about in the May 2014 column, "When Infrastructure Goes Private," which followed the failure of President Obama's infrastructure investment plans for the U.S. after Russia invaded Crimea.

These ETFs are the iShares Global Infrastructure (IGF) and SPDR S&P Global Infrastructure ETF (GII), both of which are off by about 14% so far this year, putting them back to where they were about two years ago.

A more specific way to speculate on this is through the iShares China Large-Cap (FXI), on the assumption that a large percentage of the development work will be awarded to Chinese companies. FXI is also down about 14% this year and has not recovered from the rout in the Chinese equity market earlier this year.

An even more focused way of speculating on the impact of an increase in infrastructure development throughout Asia financed by the AIIB, with the majority of work performed by Chinese companies, is through the American Depository Receipts (ADRs) of the companies most closely associated with such development.

The list of eight Chinese ADRs below is in descending order based on market capitalization and a minimum value of $1 billion:

China Petroleum & Chemical (SNP)

CNOOC (CEO)

China Telecom Corp. (CHA)

China Unicom (Hong Kong) (CHU)

Huaneng Power International (HNP)

Aluminum Corporation of China (ACH)

Guangshen Railway Co. (GSH)

China Lodging Group (HTHT)

I offer these names simply as a watch list to monitor in conjunction with any news as to how and when the AIIB will begin operations.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Arnold had no positions in the securities mentioned.

TAGS: China | Markets | Investing

More from China

Quad Meets as North Korean Missiles, Chinese and Russian Bombers Fly By

Alex Frew McMillan
May 25, 2022 9:05 AM EDT

Joe Biden concluded his first Asian spin as president with a meeting of the Quad partnership, which is expanding well beyond its original security focus.

Alibaba Is Sold out on the Downside

Bruce Kamich
May 23, 2022 1:26 PM EDT

China at a bearish extreme is an opportunity.

Biden Promises U.S. Military Will Defend Taiwan if Attacked

Alex Frew McMillan
May 23, 2022 7:51 AM EDT

Surprising even his own staff, the U.S. president overshadowed the launch of the Indo-Pacific Economic Framework for Prosperity.

Biden Visits Korea and Japan With Rare Opportunity

Alex Frew McMillan
May 20, 2022 9:00 AM EDT

On his first Asia spin as president, Joe Biden will find a surprisingly warm welcome, and is due to launch an economic framework for US-Asia relations.

A Dovish China Provides Some Support as Underlying Action Strengthens

James "Rev Shark" DePorre
May 20, 2022 7:17 AM EDT

The People's Bank of China is trying to help prop up the struggling Chinese real estate market by cutting interest rates.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 02:46 PM EDT STEPHEN GUILFOYLE

    We're Shedding Some of This Holding on Strength

    Check out the Stocks Under $10 portfolio here!
  • 11:33 AM EDT PETER TCHIR

    Thoughts Ahead of the Fed Minutes

    Recent economic and earnings issues are convincing...
  • 02:24 PM EDT PAUL PRICE

    An Interesting Chart

    I'm betting heavily that stocks will be way up aga...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login