UPDATE: State Street Global Advisors: China Stock Market A Bit Expensive
April 29 2010 - 6:57AM
Dow Jones News
State Street Global Advisors considers China's stock market "a
bit expensive" on valuation grounds, Richard Lacaille, global chief
investment officer of the investment adviser said Thursday.
However, he said State Street Global Advisors is confident in
the fundamentals of some Chinese companies. Its China A-share fund,
which invests under the qualified foreign institutional investors
program, will pick up stocks that are "relatively inexpensive" but
have "strong profit growth" potential, he said.
Asked when he expects the Chinese stock market to return to fair
value levels, he said, "it may just be a catch-up process when the
earnings and the growth of the economy rise to the extent that
justifies current prices. So that may happen over a period of
months," he said.
The QFII program, which was launched in 2003, is the only way
foreign investors can trade in China's domestically listed
yuan-denominated A shares. State Street received its QFII license
in 2008.
Lacaille declined to directly comment on China's property
stocks, which has recently been hit hard due to a series of
government measures aimed at taking the heat off a market where
prices have been surging for over a year.
The "very complex" nature of China's real estate market has made
it "challenging" to assess, Lacaille said.
State Street Global Advisors was selected in 2006 to be an
external manager for the global equity mandate of the National
Council for Social Security Fund , China's pension fund. He said
State Street has a diversifed investing approach for that mandate,
but declined to elaborate.
State Street Global Advisors is an investment management
business of U.S. financial services firm State Street Corp. (STT).
It had US$1.9 trillion worth of assets under management at the end
of 2009.
-Victoria Ruan contributed to this article, Dow Jones Newswires;
8610 8400 7799; victoria.ruan@dowjones.com
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