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News Release from: Gartmore | Subject: Corporate gains
Edited by the Insidemoneytalk Editorial
Team on 17 December 2007
Positive Outlook for Chinese Corporate
Earnings Growth
Chinese corporate earnings growth is expected to average around 30% in 2008, according to a poll of local securities analysts carried out by the news agency Reuters.
Research from the China Academy of Social Sciences shows that the earnings of major industrial companies have increased by over 37% every year from 1998 to 2006 Charlie Awdry, manager of the Gartmore China Opportunities Fund, believes that companies within the consumer sector will be particularly resilient as the Chinese economy faces further monetary tightening
This article was originally published on Insidemoneytalk on 2 Mar 2007 at 8.00am (UK)
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According to Charlie, "As concerns over the growth outlook for Western economies rise and earnings growth rates moderate, we continue to focus on domestic Chinese investment and consumer industries.
In these areas, the outlook is buoyant and earnings growth picture is robust." Gartmore's China Opportunities Fund returned 17.9% in the three months to 30 November and 430.9% over five years to the same date.
It is ranked as the leading Fund in its sector over I, 3 and 5 years.
Too Cautious Fed Rate Cut Mitigated by Concerted Central Bank Action, Says Gartmore Sub adviser Marsico: Marsico Capital Management has welcomed the latest reduction in the US Federal Reserve (Fed) Funds rate but views the cut of one quarter of a percentage point to be too cautious, according to Cory Gilchrist, manager of the Gartmore US Opportunities Fund and the Gartmore SICAVUS Opportunities Fund.
"Our view for some time has been that the US economy is slowing, and that inflation pressures are subsiding.
Fed policy generally has been behind the curve with that view," he commented.
In the immediate aftermath of the rate cut, the Fed's perceived lack of decisiveness triggered sharp share sell-offs globally.
However, US equity markets were resurgent on the morning of 12th December (local time) in the wake of news that the Fed had joined with four other major central banks to add cash to global money markets and to help stimulate inter-bank lending activity.
The Fed did seem to signal that future interest-rate cuts could take place but - again - cited inflation as an ongoing concern.
However, Marsico believes the Fed needed to act more decisively, particularly in the form of lowering the discount rate by a greater amount.
The central bank would appear to have taken insufficient account of the mounting evidence that the sub-prime and mortgage-finance problems have started to spread to the real economy - an impact that has been most acutely felt in the housing market and, more recently, on employment.
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