Money News
Baring Asset Management believes that problems in the credit markets won't derail the long-term secular growth story in China and Asia.
At the Baring Spring Investment Conference, William Fong, manager of the newly-launched onshore Baring China Growth Fund, stated that valuations in China have become more attractive following the recent market correction and that both the medium and long-term prospects for the Chinese economy remain positive.
The Baring China Growth Fund's two week initial offer period has just commenced. The fund is a UK domiciled Open-Ended Investment Company (OEIC) and may invest in small, medium and large listed companies. And within any sector and geographical region that has the potential to benefit from the growth and development of China. The fund also has a remit to invest in derivatives.
Fong meanwhile argues that China and Asia represent bright spots in an increasingly gloomy world economy and that the fundamentals in the region should act as a strong buffer against events in the US credit markets. Domestic consumption is in full bloom, the Renminbi is continuing to appreciate, while secular growth and improving corporate governance will drive a re-rating.
"Despite a reduction in risk appetite on the part of investors, which has prompted a more-or-less indiscriminate sell-off in high beta markets globally, including Asia, we strongly believe that this represents an opportunity for investors prepared to take a medium to long term view.
"Monetary tightening and measures to increase food supply should reduce inflationary pressures, especially in the second half of 2008, and fiscal spending on infrastructure should stimulate the economy and buffer any potential deceleration in exports," notes Fong.
Fong adds that no change in the economic fundamentals of China and Asia is foreseen. Corporate balance sheets in the region are as strong as ever, and the rapid build-up of domestic savings and the recycling of petro-dollars should continue to attract increasing asset allocation into this region.
02 May 2008 © Moneyextra.com
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