Offshore Capitalist

A risky time to dabble in China

Investors have long been told there are riches to be earned from China’s booming stockmarket.  But one fund manager believes that there is reason to believe now is a risky time to be investing in the superpower, with the market overdue a pull-back.

James Donald, the head of emerging markets at Lazard Asset Management is a veteran investor in Asia.  Donald has been selling his Chinese shares recently and they now make up just 1% of his Lazard Emerging Markets fund.  He said: ‘The general market view has gone from absolute despair six months ago to “the best of all time now’.  Our advice (Citywire), on a one year view, is don’t be too aggressive on China because there is a chance of retrenchment.

Chinese companies tend to be relatively expensive compared to their emerging market peers and can also grow in price more than other shares even when the companies themselves are not beating expectations in terms of profits.

via A risky time to dabble in China | Personal Investor | Citywire.

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