Ask The Experts: Positions Favoured By This Outperforming Greater China Fund
Caroline Maurer, co-fund manager of the Henderson Horizon China Fund, speaks to Fundsupermart about her outlook for the Greater China market and where she sees the most opportunities in this region.
The Chinese government has recently lowered the 2012 GDP forecast to 7.5%. What is your outlook for the Chinese economy and market for the rest of the year?
- Lowering of GDP forecasts from 8% to 7.5% should not be a big surprise to investors
- Not a sharp slowdown
- Since announcement of the new five-year plan, expectations have been for slower growth and lower inflation
- Employment remains relatively tight
- Consumption growth resilient
- Though facing slower growth, it is resilient and more sustainable
- Equity markets have already factored these expectations into valuations
- Upside remains as the Greater China market has de-rated significantly
What is your general outlook for the Hong Kong and Taiwanese market?
- Hong Kong market is more geared towards the China story
- Taiwanese market is more geared towards US and European demand
- More stock specific opportunities and less macro or thematic calls in Hong Kong due to slower growth in China
- Certain stocks have performed very poorly in Taiwan last year and so there will be more stock picking in the Taiwanese market as well
Are there any specific investment themes within the Greater China region that you are bullish on?
- Less focus on thematic investments and more on stock specific stories
- Overall, still very interested in the consumer discretionary and energy sectors
- Within these two sectors, there are a number of names the fund really likes
Are there any sectors that you are particularly bullish and bearish on in the Greater China market?
- More cautious on the industrial sector due to slowdown in earnings
- Higher raw material prices and slower demand have hurt the profitability margins of these industrial companies
- Also cautious on shipping industry
||: Ask The Experts: Positions Favoured By This Outperforming Greater China Fund