Invesco Perpetual Asian fund manager Stuart Parks has raised his fund’s exposure to China despite concerns that the country may be overheating following the market recovery.
Parks says the Asian team took a large amount of money out of Chinese banks at the end of 2009 but there is now considerable value across a number of sectors.
The team has added more than 3 per cent to its China and Hong Kong exposure from the end of last year, bringing it to almost 40 per cent of the portfolio. This includes property-related stock E-House as well as China Shenhua, the country’s biggest coal company.
He says: “We would expect earnings growth to be strong for the rest of this year and next while the price per earnings multiples we are paying are not expensive. I expect we will continue to add.”
Parks says the Chinese government has been quick to put in place monetary and administrative regulations to quell inflationary pressures before they get out of hand.
He says: “The Chinese government has been obsessed with micro-managing the economy to ensure it does not get too hot or cold. We are more concerned with ripples from Europe.”