The long weekend saw me doing more reading than usual. I also read why Mark Mobius, the executive chairman of Templeton, thinks the time is ripe to invest in Chinese equities.
Consumers have more disposable income:
Many consumers in China have been getting annual increases in wages of 20% or more. More personal assets could be funnelled into savings and investments.
Government spending:
The government is devoting more resources to infrastructure and subsidised housing as well as extending social security, education and health benefits to new migrants to the cities.
Fuel for the economy:
Between 2010 and 2011, interest rate in China increased 5x and are now at a 6% lending rate. The government has a lot of room to reduce rates if they need to stimulate the economy.
Volatility brings opportunity:
This year is likely to bring volatility which brings opportunity. We plan to go along ......