Financial bonanza

The plunge of China’s stock market has created long-term buying opportunities in infrastructure and consumer shares, the head of HSBC’s (HSBA.L: Quote, Profile, Research, Stock Buzz) (0005.HK: Quote, Profile, Research, Stock Buzz) asset management unit said on Tuesday.

“Even after you modify China’s growth rate down, it’s still showing very strong and solid growth forecasts in the coming years,” Mark McCombe, chief executive of HSBC Group Investment Businesses, said in an interview in Shanghai.

“The upside should be better than the downside at the moment and we don’t think we have much further to go,” he said of the market’s slide.

The benchmark Shanghai Composite Index sank to a fresh 19-month closing low of 2,457.198 points on Tuesday, down 60 percent from last October’s record peak. It has been hit by heavy supplies of fresh equity and concern that a slowing economy will hurt corporate profit growth.

But McCombe said that though the U.S free credit report .com. economic slowdown was dampening emerging markets, China’s long-term outlook for economic growth remained strong enough to justify investment in infrastructure and consumer shares that would benefit from expanding domestic demand.

“When I was here a year ago, you had a stock market which was booming and you had the currency appreciating,” he said at the Shanghai office of HSBC Jintrust Fund Management Co, HSBC’s China fund venture, which was founded in 2005. “These things cannot go on forever.”

DIVERSITY

Despite this year’s turmoil in global markets, McCombe said HSBC’s asset management business would continue to grow because of its diversity in terms of regions, asset classes and customer types. 

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