China equities seen attracting further investment inflow in 2007 - Credit Suisse |
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Thu, 11 Jan 2007 08:23
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HONG KONG (XFN-ASIA) - China's equity markets are forecast to continue attracting investment fund inflows this year, given the country's robust economic growth and strengthening currency, Credit Suisse private banking division's Asian equity research head Fan Cheuk Wan said.Fan said she expects corporate earnings from the mainland to grow 12 pct year-on-year in 2007 on the back of an expected soft economic landing, further yuan appreciation and infrastructure boom.She said growth will be supported by earnings from sectors such as banking, insurance and telecommunications.Fan has an 'overweight' call on China.However, she cautioned that a correction on the Hong Kong and China markets is expected to continue in the near term.'The sharp spike in the index (MSCI China free index) indicated that China shares (are now) extremely overbought from a technical perspective. Investors may want to wait for a more attractive re-entry opportunity,' she added.The MSCI China free index jumped 35.7 pct year-on-year in the fourth quarter and 16.4 pct in December last year.Outside China, Fan offers 'overweight' recommendations on markets such as Japan, Taiwan, Korea and Singapore. She remains 'neutral' on Hong Kong, Malaysia and Thailand.Fan has an 'underweight' call on Indonesia and Australia due to limited upside in these markets.'Within Asia, Fan expects the financial, consumer and technology sectors to offer strong growth opportunities.She also said the strengthening of the Asian currencies will be among the major market themes for the year.leonora.walet@xfn.comlw/net
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