Funds News
- Shanghai News
Date: 8-Oct-2007 Sources: (Shenzhen Daily)
THE insulation of China's stock markets from the global financial turmoil has kept the country's equities popular among international fund managers despite recent price gains, according to a monthly poll of fund managers active in Asia.
Driven by domestic investors with massive savings, a seemingly insatiable appetite for stocks and government imposed limits on asset flows, China's bourses have far outpaced other global equity markets and remained protected from credit market trouble that weighed on stocks elsewhere. The Shanghai Composite Index is up 20 percent since the end of July.
Though managers anticipate some turbulence ahead, including a period of underperformance by Chinese shares as other markets race to catch up, many think that the long-term outperformance of Chinese stocks is set to continue.
That's partly because few expect Chinese authorities to take major steps to cool stock price gains.
'With liquidity conditions strong and the authorities unlikely to want to cause a major reversal, only targeted and incremental measures are likely,'said Nicholas Brooks of Henderson Global Investors.
Managers also favor India, though they remain cautious about the impact of foreign capital flows and a slowing of economic growth.
Still, India is seen as somewhat insulated from an economic slowdown in the United States thanks to its relatively small export sector.
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