Lloyd George Management is favouring Hong Kong, China and Korea in its Far East excluding Japan Oeic...
Lloyd George Management is favouring Hong Kong, China and Korea in its Far East excluding Japan Oeic with a bias towards the banking sector.
Adaline Ko, who runs LG Eastern Opportunities, said the Chinese economic recovery will be boosted by China's entry into the World Trade Organisation (WTO). She added the Hong Kong market continues to surprise on the upside with export growth of 19% between January and April this year.
Ko said: "A major economic turnaround in China is demonstrated by expansion in GDP, exports, retail sales, investment and money supply. Deflation is easing and should soon be over and consumer price inflation has remained at around 0% for the past three months. WTO entry this year will speed up economic and political reform and prompt a new wave of foreign investment.
"In Hong Kong, the worst is over for the residential property market with affordability at its best for a decade. Hong Kong's market rally will resume as the interest rate cycle peaks, despite the moderate slowdown in US economic growth.
"The performance of banking and property stocks is set to improve in the fourth quarter as rate hike pressure eases. Banks are the main beneficiaries of the peaking in interest rates and are seeing positive earnings revisions, although loan growth may still be moderate. Korean banks look particularly cheap, for example Shinhan Bank is on a price to book ratio of 1.1 times and a P/E of eight times."
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