JP Morgan CIT Predicts Continued Growth In Chinese Equities

Vanessa Doctor

28 February 2010

The managers of the JP Morgan Chinese Investment Trust, the UK-based investment trust that focuses on opportunities in Greater China, are forecasting continued growth in equity markets in 2010.

The firm defines Greater China as China, Hong Kong and Taiwan. The Chinese economy is expected to expand by around 10 per cent this year, making China the "backbone of a positive Greater China theme," JP Morgan said in a statement. This anticipated growth is faster than any other major economy, the firm notes.

"We agree that the market may be volatile in the short term as concerns are raised over the ending of easy monetary policy in China. However, we believe that market volatility will offer attractive entry points to investors, as the long term structural growth of China remains strong. Sectors we currently favour include financials, property, consumer, technology and commodities," said Howard Wang, lead manager.

The managers believe that China's positive transition will go beyond exports and will be led by domestic consumption and infrastructure investment, particularly in the rural areas where wealth volumes are expected to surge.

Just recently, UK's Insynergy Investment launched a new China-based fund to capitalise on the country's growth prospects, a move that helps quell industry talk that the country is about to enter a market bubble due to oversaturation.

"The question they should be asking themselves is not whether this is necessarily the perfect time to be investing in the Chinese market, but whether they can afford to be out of China on any long-term view?" Spike Hughes, the chief executive and founder of Insynergy, was quoted as having said in a previous article by this publication.