Fidelity China Special Situations (LON:FCSS) has announced its monthly summary for January 2024.
Portfolio Manager CommentaryChina is at a different point in the economic cycle compared to the West. Risks of an economic slowdown has increased in the US and Europe amid higher interest rates. Inflation has not been a problem in China and the government is taking measures to stimulate investment and consumption. Despite sluggish economic activity, the overall trend still points towards an economic recovery. Consumer confidence remains soft, mainly due to a weakened property market, but the government is addressing this by implementing various measures. A substantial amount of household savings sets the stage for an upswing in consumer spending once confidence is restored. Improved corporate earnings could be a key driver for the return of broader investor confidence. Valuations in the Chinese equity market are very compelling both in historic terms and vs other markets.