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Monday, 14 September 2009
Chinese stocks expected to outperform US blue chips: ING
Chinese stocks should continue to see strong performance and are likely to outperform the US blue-chip stock market in the medium term, an ING investment director told Reuters.
Chinese stocks expected to outperform US blue chips: ING
Reuters 14 September 2009
(FRANKFURT) Chinese stocks should continue to see strong performance and are likely to outperform the US blue-chip stock market in the medium term, an ING investment director told Reuters.
‘At this moment, we believe China’s A-shares, coming down roughly 25 per cent from their peak, but still up 40 per cent year-to-date, have upward potential for the rest of the year. This applies for Hong Kong’s H-shares as well,’ said Roy Scheepe, director of business development, Asia-Pacific, at ING Investment Management on the sidelines of an ING emerging markets investment event in Frankfurt.
Mr. Scheepe said that China’s size and its strong growth would continue to make it appealing to investors.
He added that the country is in the middle stages of a typical growth pattern which many other countries have gone through, which he termed the ‘Golden 25 Years’.
‘China is going through a stage of development which is not entirely unique. European countries went through this phase as did the US. If we look at Germany, we could look back at the Wirtschaftswunder of the 1950s 60s, and 70s as its time of tremendous growth,’ he said.
‘The question is, if I had just one euro to invest, whether I would put it in a region where grow rates are going to be minimal or where you see a high potential,’ he added.
ING Investment Management - an investment arm of Dutch Bank ING - has an ‘overweight’ stance on China and around US$81.1 billion in assets under management in the Asia-Pacific region, making it the third largest regional player.
ING’s Greater China fund strategy manages assets of around US$226 million, and the Luxembourg- based fund has seen a net annual return of 16.4 per cent since its inception in May 2003, 6.64 percentage points above its benchmark, the MSCI Golden Dragon (Net).
Mr. Scheepe said that there are several investment themes that an investor could follow to benefit from China’s rapid growth.
‘The Chinese government passed massive infrastructure investment packages which give out around four trillion yuan (S$836.4 billion) in state aid. We see this aid benefiting infrastructure, energy companies, alternative energy companies and the construction sector,’ he said.
He said that the Chinese are conscious of the fact that they are heavily dependent on oil and, to become a truly developed country, will likely have to curb oil dependency and look to alternative energy.
He also highlighted health care and social security reform as an area which could benefit healthcare, pharma and consumer discretionary companies.
He pointed to Chinese government plans to allocate up to 850 billion yuan to cover a basic universal medical service including a catalogue of drugs produced and distributed under government control, starting in 2009.
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Chinese stocks expected to outperform US blue chips: ING
Reuters
14 September 2009
(FRANKFURT) Chinese stocks should continue to see strong performance and are likely to outperform the US blue-chip stock market in the medium term, an ING investment director told Reuters.
‘At this moment, we believe China’s A-shares, coming down roughly 25 per cent from their peak, but still up 40 per cent year-to-date, have upward potential for the rest of the year. This applies for Hong Kong’s H-shares as well,’ said Roy Scheepe, director of business development, Asia-Pacific, at ING Investment Management on the sidelines of an ING emerging markets investment event in Frankfurt.
Mr. Scheepe said that China’s size and its strong growth would continue to make it appealing to investors.
He added that the country is in the middle stages of a typical growth pattern which many other countries have gone through, which he termed the ‘Golden 25 Years’.
‘China is going through a stage of development which is not entirely unique. European countries went through this phase as did the US. If we look at Germany, we could look back at the Wirtschaftswunder of the 1950s 60s, and 70s as its time of tremendous growth,’ he said.
‘The question is, if I had just one euro to invest, whether I would put it in a region where grow rates are going to be minimal or where you see a high potential,’ he added.
ING Investment Management - an investment arm of Dutch Bank ING - has an ‘overweight’ stance on China and around US$81.1 billion in assets under management in the Asia-Pacific region, making it the third largest regional player.
ING’s Greater China fund strategy manages assets of around US$226 million, and the Luxembourg- based fund has seen a net annual return of 16.4 per cent since its inception in May 2003, 6.64 percentage points above its benchmark, the MSCI Golden Dragon (Net).
Mr. Scheepe said that there are several investment themes that an investor could follow to benefit from China’s rapid growth.
‘The Chinese government passed massive infrastructure investment packages which give out around four trillion yuan (S$836.4 billion) in state aid. We see this aid benefiting infrastructure, energy companies, alternative energy companies and the construction sector,’ he said.
He said that the Chinese are conscious of the fact that they are heavily dependent on oil and, to become a truly developed country, will likely have to curb oil dependency and look to alternative energy.
He also highlighted health care and social security reform as an area which could benefit healthcare, pharma and consumer discretionary companies.
He pointed to Chinese government plans to allocate up to 850 billion yuan to cover a basic universal medical service including a catalogue of drugs produced and distributed under government control, starting in 2009.
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