GUANGZHOU (Fund China) - Along with the bells of 2008 ringing, investors began to look forward to the new year. What will the stock market be in 2008? Many fund managements said that the bullish market will go on and look forward to the comsuption industry.

A hard fundament for the economy growth

Huafu fund management said the strong growth in china macro economy this year will boost the the stock marekt grow up higher. There will be a limited down move margin for the economy and the China GDP increased margin is expected to from 10.5% to 11%,as re-release of the growth in the capital asserts and the domestic demand, adress in the 2008 A share investment strategy.

The CPI will be restrained and is expected to be control in 5% as the appreciation of the renminbi is Speeding up. The China economy is showing a high growth but low flation golden period. And the excess liquidity and the fast growth of the listed companies sustain the bullish market and bring a high valuation of the stock market. The stock index is expected to float in the section from 4500 to 7000 in 2008 backed by the high growth of the listed companies.

The fund manaements look forward to the opportunity brought by the China’s export slowdown and economy structure transition. Comsumption, capital injection, and the save energy and reducing release of the pollutant are the three main invest borad from the industry view.

Although consumption industry’s valuation is relatively high, China’s consumption demand appeared a upward inflexion and a higher-than-expected profit is expected in the future. Suggestion for investment is choosing the inidurstries from the rapid growth of the demand and resistance of the inflation, and pay attention to the real estate, medicine, liquor, tourism, and other attributes of consumption industry.

Three main power engine

ABN Amro TEDA Fund Management said China has become an economy great power in the world along with many years high-speed, stabled and contiual economic development. The RMB appreciation, the gradual consummate of the social security fund sysytem and the high-tech.revollution will be the three main power boosting the stock market growth. According to the World countries and regions experience of the appreciation of the local currency, in the period of currency appreciation, the stock market will be boosted to bullish, address in the proseminar of the products innovation for the masses financing recently.

Considering the tightening monetary policy and the tone of a steady development of the macroeconomic, the market is likely to show “big band” typical in 2008 although the stock market still on the upswing. The investors may be appropriately concerned about the listed companies related to Beijing Olympics, the statej-own corporation’s overall listed such themes this year.

In view of the 2008 market shocks pattern,ABN Amro TEDA Fund Management cautioned the investors,it is really a samll part of people that can gain yield by sell and buying shares relying on independent judgement, the significant profitable market relying on “only holding shares” like two year ago will gradually disappear.

Thus, ABN Amro TEDA Fund Management suggests the ordinary investors to choose the fund for investmetn, such as ABN Amro TEDA Enhanced Industries Fund etc.. Open position in batch in the shockable market so as to reduce investment risk and achieving steady income said the Fund Management.

Copyright Fund China 2008.

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