What & Where To Invest 2012 Seminar: Is It A Great Time To Do It In The Year Of The Dragon
Adeline Lua, Director, Investment Services & Wealth Management at Prudential Fund Management Berhad shares her outlook on China equities in 2012.
1. It was a tough year for equities, even more so for China equities. Why is this so?
Investors were quite concerned with China governmentâs tightening measures due to high inflation which peaked in the mid of last year.
2. What would likely be the driver for China equities in 2012?
- Valuation at 10-year low, quite close to the low of 2008
- Easing measures to promote economic growth
- Long-term structural story such as domestic consumption growth
3. What are the key risks of Greater China equities?
One of the main risk is the property bubble. Property prices have reduced 10 â 20% in major cities and the government has been building a lot of subsidized apartments to cushion the property bubble.
4. Is it a good time to invest now?
The 12th Five-Year Plan focuses on domestic consumption, the rising of the middle class population and their income, coupled with cheap valuations, makes it a good time to look at China. If investors are risk averse, they can choose to do a gradual investment.
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