Daily Management Review

Fidelity Intl Believes Chinese Stocks Now Are 'Very, Very Attractive'


01/18/2019




Fidelity Intl Believes Chinese Stocks Now Are 'Very, Very Attractive'
Global investment house Fidelity International has predicted that one of the best places to invest in Asia in due is China and its valuation as described as "very, very attractive" despite an apparent slowdown in the economy of the country.
 
Chinese economy, the largest in Asia and the second largest in the world has been throwing up a number of sings signals of a potential slowdown during the second half of the last year. Chinese stocks had fallen by more than 24 per cent in 2018 which is the worst performance of those markets in a decade primarily because the China got entangled in a trade war with the United States under which both the countries imposed additional tariffs on each others’ goods worth billions of dollars.
 
According to Medha Samant, investment director for Asian equities at Fidelity International, responding to a question about the safest place to put money in, said: "It's really north Asia, it's being led by China, we think." She said in a television interview that valuations of Chinese stock are looking "very, very attractive right now."
 
"What matters to us as active investors is ... what's happening on the ground in China," she said. Further, the attractiveness of Chinese stocks has increased also because of the measures that have been taken by Chinese authorities to give some support to the slowing down economy in recent months. Tax cuts and bringing down the amount that banks are mandated to hold as reserves are some of those measures.
 
In addition to the consumer and healthcare sectors, the stocks in the new economy are also attractive, Samant said. The attractive stocks according to her also include "very select old economy assets" because of the current value and their potential for yield.
 
She added that even though "the outlook is definitely more positive," yet there are some headwinds that are being faced by the Chinese economy, she said. She therefore added that there has to be some careful selection by investors.
 
"There are these other headwinds which are impacting sentiment, which means that there could very well be stocks pulling back ... in certain areas of the market," she said. "Is it time to go in and be a big buyer? Well, you got to be selective, it comes back to that. Look for areas that still make sense fundamentally and (where) valuation has come down."
 
There are apprehensions that the Chinese economy would slow down more than is being expected because of the dragging on of the trade war with the US. Frederic Neumann, co-head of Asian economics research at HSBC, said the official target for the growth of the Chinese economy in 2018 was 6.5 per cent while most economists are of the opinion that the economy progressed at about 6 per cent last year.
 
According to Neumann, more support from authorities is needed by the Chinese economy, but the "rumored" official growth target range of 6 to 6.5 percent is "still a fairly decent outcome."
 
"The problem at the moment is the market is worried about a weaker outcome than that. China has to signal clearly that they've put a floor on the growth. Once they do that, I think we all can breathe a little bit easier," he said.
 
(Source:www.cnbc.com)






Science & Technology

Study: Machine learning is five times more harmful for the environment than a car

Would Singapore Be The First One To Bring Lab Grown Shrimps To The Global Market?

Apple Patents A ‘Foldable Screen’ For Creating Foldable iPhones

Research Shows Air Pollution Causing Birth Defects

Microsoft tells about operating system of the future

Study: Third of US kids wake up at night to check their smartphones

Deepfake AI Technology Used By Researchers To Bring Mona Lisa ‘To Life'

China is developing technology to capture greenhouse gases

IEA: The growth of renewable energy is slowing

Google introduces new smartphone and beta Android Q

World Politics

World & Politics

Iranian Foreign Minister urges other countries to abandon the dollar

The EC recommends starting penalty procedure against Italy

European Breweries To Up Their Brewing Innovation Amid Green Legislations

‘Frequent’ Shootings Causes China To Issue Travel Advisory Against US To Its Citizens

Facebook’s appeal to stop ECJ data case rejected in Irish Supreme Court

Trump: Japan to buy 105 F-35 fighters from the USA

Theresa May to resign on June 7

The Earth Is ‘Not On Track’ To Tackle Global Warming: The U.N. Secretary General