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Can I invest in Huawei?

A reader asks if there is a local platform to buy into Chinese juggernaut.

While it doesn’t come with the glamour factor attached to Apple or Samsung, Chinese smartphone and technology group Huawei is a company which is slowly catching the attention of global investors. A Moneyweb reader has asked what the fundamentals are for the group and if it is possible to trade the share through the Webtrader platform. 

Mobile phone sector guru Tomi Ahonen believes that Huawei is likely to scrap it out with the likes of LG and Xiaomi for fourth place in the global marketplace behind Samsung, Apple and Lenovo. Ahonen recently wrote on his blog: “Huawei has signalled it wants to focus on the top end of the smartphone market  but that means that it won’t be able to grow as much as the market does, which is at the bottom.
 
The company has however not been without controversy. It has long had to counter rumours that its technology was used for spying and has run afoul of the US by doing business with Iran.
 
As a listed investment Huawei has not done too badly relative to its peers delivering 55% over the past 12 months. In contrast Apple has delivered 61%, Samsung around 15%, Lenovo 40% and LG -5.6%.
 
This performance has driven some investors to consider looking at the Chinese juggernaut as a potential investment. However with the company being listed in China there are no options to trade the share through the Webtrader platform at the moment. 
 
Simon Brown from Justonelap.com says that there are no American Depository Receipts (ADR) listed either but should they become listed on other major bourses, this could be an option for making an investment in the company. An ADR is typically used by businesses looking to broaden their capital base by listing shares or units on other major bourses. 
 
For now, South African investors in Huawei will need to bide their time, but with Chinese groups making big strides in global capital markets, they may not have to wait too long. 
 
Apple, Samsung and LG are available for trade through the Standard Bank Webtrader platform. For more information about the Standard Bank Webtrader platform please click here or e-mail your offshore investing enquiries to marc@moneyweb.co.za
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