1st February 2016
It has already been a tough start to the year for the Chinese market, as the Chinese New Year, the year of the monkey approaches on 8 February.
Monkeys in the Chinese zodiac are ‘clever, mischievous and curious’ so we’ll have to see if this brings about a luckier year for Chinese markets.
Certainly fund managers investing in China are proving sanguine.
The Association of Investment Companies (AIC) has collated views from investment company managers on China and according to the trade body one thing ringing out loud and clear is that the spectacular growth story of the past should not cloud judgement on the China that investors see today…
Dale Nicholls, manager, Fidelity China Special Situations said that China “continues to grow at a better pace than the developed world and personal consumption is likely to outpace this rate of growth as the economy transitions towards a consumer-led market.”
Howard Wang, manager, JPMorgan Chinese Investment Trust comments said: “It’s important for investors to acknowledge and be comfortable with China’s slower growth. Many secular growth opportunities with strong multi-year prospects still exist across Chinese equities, especially in the “new economy” sectors of healthcare, internet, consumption and environmental protection.”
Similarly, Ian Hargreaves, manager, Invesco Asia, explains: “I have just returned from a research trip to China and found nothing to suggest that the economy is deteriorating at a more rapid rate than we have seen so far. Neither did I find any evidence of new factors undermining the resilience of the consumer and service sectors.”
Mark Mobius, executive chairman, Templeton Emerging Markets Group and Co-Manager of Templeton Emerging Markets Investment Trust said: “We are not terribly concerned about growth in China, nor its long-term investment prospects. We would dub current 2016 projections of about 6% in gross domestic product growth as quite strong…”
Ewan Markson-Brown, manager, Pacific Horizon Investment Trust added: “China is amidst its great transition from an investment led economy to a service led economy, with services growth accounting for 80-90% of recent GDP growth (Sept 15)…Currently the market is focusing on the losers of this transition…we expect in time, the market to turn back its attention to the long-term service oriented winners.”