Managers eye mainland stocks
By Lydia Chen |
00:22 UTC+8 August 18, 2011
|
Print Edition
Print Edition
MORE than 60 percent of 50 professional money managers in Asia said in a survey they prefer equity markets on Chinese mainland, consulting firm Russell Investment said in a report yesterday.
Among the 50 managers, 63 percent remained bullish on the mainland as their fears of a hard landing in the world's second-largest economy ease. They also expect inflation to peak this quarter, the Seattle-based firm said in the Asian investment manager outlook report.
After five increases in the reserve requirement ratio by the People's Bank of China this year, managers expect the current 21 percent ratio to sufficiently slow lending without stifling longer-term growth.
Managers also downplayed local governments' debt and contagion effects on the mainland, saying the central government has unparalleled access to deep and liquid capital markets that will prevent a bank collapse like that experienced by Lehman Brothers in the United States.
Hong Kong is also attractive to the managers as low unemployment and strong private consumption continue to boost growth prospects, they said.
As many stocks listed in Hong Kong are linked to businesses on the mainland, many managers believe the city's market offers access to the mainland. Government measures to cool the overheated property market in Hong Kong are also viewed favorably.
The South Korean market was favored by 47 percent of the managers who cited the country's growth potential, according to the report.
Managers are keen to capitalize on South Korea's strong corporate capital and its advanced manufacturing, with particular interest in shipbuilding, autos and petrochemicals, according to the report.
Among the 50 managers, 63 percent remained bullish on the mainland as their fears of a hard landing in the world's second-largest economy ease. They also expect inflation to peak this quarter, the Seattle-based firm said in the Asian investment manager outlook report.
After five increases in the reserve requirement ratio by the People's Bank of China this year, managers expect the current 21 percent ratio to sufficiently slow lending without stifling longer-term growth.
Managers also downplayed local governments' debt and contagion effects on the mainland, saying the central government has unparalleled access to deep and liquid capital markets that will prevent a bank collapse like that experienced by Lehman Brothers in the United States.
Hong Kong is also attractive to the managers as low unemployment and strong private consumption continue to boost growth prospects, they said.
As many stocks listed in Hong Kong are linked to businesses on the mainland, many managers believe the city's market offers access to the mainland. Government measures to cool the overheated property market in Hong Kong are also viewed favorably.
The South Korean market was favored by 47 percent of the managers who cited the country's growth potential, according to the report.
Managers are keen to capitalize on South Korea's strong corporate capital and its advanced manufacturing, with particular interest in shipbuilding, autos and petrochemicals, according to the report.
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