Asset managers are upbeat about China’s stock market, with corporate profits getting a boost from falling oil prices, the Hong Kong Economic Journal reported Friday.
Nicholas Yeo, a director at Aberdeen Asset Management and head of China/Hong Kong equities, expects Chinese firms to post profit growth in high single-digit to low double-digit.
Companies that undertake restructuring to produce quality growth will benefit the most from the positive business environment, he said.
Joshua Crabb, head of Asian equities at Mutual Global Investors, said the Asian economy will benefit from cheaper oil and lower commodity prices.
Given their relatively low valuation, stocks in China and South Korea are likely to outperform, he said.
A rally in Chinese stocks despite a regulatory crackdown on illegal leveraging activities such as margin trading and short selling is a sign of real market demand.
More liquidity will flow into undervalued H shares, Crabb said.
Mainland banks and insurers are among his top picks.
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