PCFM: Focus on China’s fundamentals rather than coronavirus

Investors should focus on China’s investment fundamentals, like the continued growth of the middle class and the rapid growth of urbanisation, rather than on the short-term impact of the coronavirus, according to Premium China Funds Management’s (PCFM) chief executive and chief investment specialist, Jonathan Wu.

Although Wu admitted the virus had caused a lot of uncertainty for investors, their view on the long-term exposures to China should remain unaffected as the circumstances did not significantly alter the fundamentals.

“The seriousness of the coronavirus should not be underestimated but nor should investors lose sight of the fundamentals which have seen China grow to become the world’s second-largest economy or the manner in which this has propelled millions of people out of poverty,” Wu said.

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“Consumer spending is still low in China but all the data points to it rising significantly with consequent benefits for both locally-based and international companies with the ability to meet that demand.

 “As investors we are focused on the fundamentals and are closely watching our favoured consumer names with a view to increasing positions,” Wu said.




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