Marc Faber, publisher of the Gloom, Boom and Doom report, said he increased his investments in Hang Seng Bank Ltd. (11) and Sun Hung Kai Properties Ltd. (16) because their dividend yields will help them beat government bonds and cash.
“I happen to prefer to play China through some high- quality companies,” Faber said in an interview on Bloomberg Radio today. “They have reasonable dividend yields and they’re high-quality companies.”
Faber said global equities have fallen farther than warranted and he prefers Asian stocks even considering economic growth concerns in China. He bought Sun Hung Kai, Hong Kong’s biggest developer by market value, and Hang Seng Bank, the Hong Kong lender majority owned by HSBC Holdings Plc, because they may benefit from growth in the world’s second-largest economy.
Sun Hung Kai and Hang Seng Bank have an indicated gross dividend yields of 6.91 percent and 5.65 percent, respectively. The Hang Seng Index has a dividend yield of 3.81 percent, while the Standard & Poor’s 500 Index yields 2.27 percent.
“You’re better off by investing in equities than in government bonds and in cash for the next 10 years,” Faber said. “You have to live with volatility,” he said. “I’m not all that bearish about stocks.”
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