Ben Bernanke’s dour assessment of the U.S. economy pushed China stocks in Hong Kong lower Thursday, ending the mini-rally that brought Hong Kong and Shanghai markets off year-lows Monday. But enough gloom and doom.
“Now and the next few months will be a terrific time to invest in China-related stocks,” Andy Mantel, founder and CEO of Pacific Sun Advisors, told Equities in and email. “I believe the Chinese economy will gather strength by early next year. Many subsidy programs for cars, appliances/etc expired this year so next year should see high year on year growth following lower growth this year. Wages and domestic demand are increasing.”
Pacific Sun hopes to take advantage of looming growth in China stocks by launching a long-only fund for small and mid-cap stocks called Pacific Sun Greater China Equities Fund.
Mantel and a number of other analysts acknowledge the market is now beset by serious worries. Chinese inflation, European debt and slowing U.S. economic growth top the daunting list. But market P/E levels are low by historical standards, and corporate profits are solid. And afterall, one of the main tenets of stock investing is “buy low.”
“We reiterate our view that current valuation of the Hang Seng Index (for Hong Kong blue chips) is attractive for long-term investors,” Guoco Capital wrote on its website Thursday.
BOCOM International wrote: “Near-term upside limited, eyes on blue chips with cheap valuations for long-term investment.”
The message appears to be that investors should at least start to consider to buy low. End
DAILY FIX -- U.S. Economy Worries Sing Stocks
Hong Kong Blue Chips: -101, -0.5%, to 21,759, 06-23-11, Hang Seng Index
Chinese Stocks in Hong Kong: -82, -0.7% to 12,067, 06-23-11, HSCE Index
Shanghai Stocks: +1.5%, 2,688, 06-23-11, Shanghai Composite Index.
Chinese Stocks in the U.S.: -4.6 to 415.1, 06-22-11, Bank of New York Mellon, ADR Index-China
Insight: Hong Kong stocks fell sharply following the Fed's gloomy assessment of the U.S. economy, but rising A-shars in China helped shrink losses in weak turnover. KGI Research
Quotable: "Besides, investors will also eye on the direction of US Dollar to determine the near term trend of global and local stock market." KGI Asia. 6-23-2011
Chinese Company to Watch: "CHINA OILFIELD (02883) Prospective P/E of 11x. Sister company CNOOC will increase its capex (capital expenditures) on oilfield exploration which will favor the Group." KGI Asia. 6-23-2011
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For a list of Chinese companies sold in the U.S. and information on each company go to http://www.adrbnymellon.com/dr_country_profile.jsp?country=CN
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