Posted January 25, 2015 12:04 pm by Comments

Tim Gregory, the head of global equities at the wealth manager at Psigma Investment Management, has been quoted by FE Trustnet as saying: “We like India, we like China – although Chinese stocks have really run hard and probably need a pause for breath and we would like to buy them again on weakness.” A visit to Shanghai last summer gave him confidence that there wouldn’t be a Lehman Brothers-style catastrophe in China plus he noted:

“We felt that, helped by this introduction of the new trading between Hong Kong and Shanghai, Chinese equities were due to rally strongly. I have to say, we did not expect to get all of that performance in a six-week period between the middle of November and the first week of January.”

“As a result, we feel that Chinese equities after this incredible move – which really hasn’t been based on any change in the fundamentals, apart from some moderate easing of policy – have moved from being incredibly cheap to justifiably cheap.”

“We cannot ignore that there are concerns over shadow banking and there are concerns over a dislocation in the property market where there is over-supply and over-leverage, so we don’t expect a huge rebound. We did reduce our exposure to Chinese equities last week.”

In addition, Gregory likes India and says he is looking to buy more there over the coming few months:

“If we saw a fall back to 26,000 on the Sensex, you would see us going long in that area again.”

Note: It peaked 29,000 in September/October and has done nothing for three months.

To read the whole article, Gregory: You must ditch your catch-all emergings market fund, go to the website of FE Trustnet.

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