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Liontrust chief aims to build on infrastructure

Liontrust fund manager Jer-emy Lang believes that there will be numerous stock opportunities as the market endures a difficult economic environment over the next 12 months.

Lang, who manages both the Liontrust first income and first growth funds, believes some stocks, such as retailers and engineering companies, are on cheap valuations to discount the difficult market conditions while growth stocks are also being pulled down by the general market.

One opportunity he points to in his growth fund comes courtesy of the boom in infrastructure, as he says India and China will be largely immune to Western bank woes.

He says: “Emerging markets are generating their own, non-export-led economic growth and will continue to invest in infrastructure projects. Thus, there are still investment opportunities among infrastructure companies listed in the UK.”

Lang says the US government-induced bailout of financial institutions is likely to result in two scenarios, either higher inflation or further slowing of economic growth.

He says: “It is possible to make money out of either a period of slower economic growth or increased inflation. This is because for many stocks an awful lot of risk is already priced into their share prices and some growth stocks with pricing power perform well in inflationary periods.”

One area Lang says he is cautious on is banks, where he feels that any value being seen is just an illusion.

He also urged caution on the ban on short-selling. He says: “The ban does not solve anything. The strong per- formance in stockmarkets on Friday, September 19 was because hedge funds were unwinding short positions.

“The UK economic outlook looks bleak over the next 12 months. There will be no quick solution to the financial meltdown. Much of the banking system is unwinding and it will take a long time to unravel.”

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