No Second-Half Rally for China Stocks, Top Fund Manager Says – Bloomberg 06-27-12

Salient to Investors:

The Shanghai Composite trades at 9.69 times estimated profit, versus the MSCI BRIC Index (MXBRIC), at 8.36 times profit.

Qu Hongbin at HSBC Holdings said China hasn’t responded quickly enough to the economic slowdown.

Predictions:

Yu Guang of Invesco Great Wall Fund Management says China’s economy will remain in the doldrums in coming months, preventing a Half2 rally for Chinese equities, which will range-bound. China will do just enough to prevent its economy from slowing further but won’t take more aggressive measures to boost growth. Property, auto and household-appliance stocks may outperform. Automakers and household appliance stocks will gain on low valuations and stable earnings growth.

Wang Qi at Yinhua Fund Management said on May 25 that stocks will rally in Half2 on government pro-growth policies. Beijing Gao Hua Securities forecast the Shanghai index will rise to 2,750 by year-end.

Read the full article at http://www.bloomberg.com/news/2012-06-26/no-second-half-rally-for-china-s-stocks-top-fund-manager-says.html