Guest Column

Faith in China rally

  • Published 29 Oct 2009

Ezra Sun, director, fund manager and head of the Far East at Veritas, is confident that this year's strong market recovery will continue.

Equity markets continue to rally in the third quarter and the Chinese market continues to do well. Although it has already bounced back very strongly this year, we remain positive that the rally will continue. Stable global growth, strong China growth and high levels of liquidity are a potent combination for outperformance in the Chinese market. One year after the Lehman bankruptcy triggered the global financial meltdown, we believe that the downside risk of another crisis similar in scale is a very low probability event. Purchasing managers index (PMI) indicators continue to improve globally with US manufacturing PMI rising to 52.6 in September 2009, up from a low of 32.9 in December 2008, and China manufacturing PMI rising to 54.3 in September 2009, up from a low of 38.8 in November 2008.

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