Osaka, JAPAN - Osaka-based Nippon Capital AM (Nippon Capital Asset Management J-LLC ) has told clients that although China’s mainland stock indices have soared impressively this year, a combination of factors including the likelihood of more monetary stimulus from the country’s central bank mean that the rally could have further to run before any meaningful correction.

Year to date, the Shanghai Composite is up 49 percent while the Shenzhen Stock Exchange is up 107 percent leading many commentators to express concern over how long stocks can continue to rise when by some valuation measures, many appear over-valued.

Nippon Capital AM attributed the sharp rally to the success of the recently-introduced link between the Shanghai Composite and Hong Kong’s Hang Seng Index which granted unprecedented access to mainland equities and the People’s Bank of China’s interest rate cuts.

“We’re expecting a further boost to Chinese equities when MSCI, the world’s biggest indexer, decides on June 9 whether to include mainland China stocks in its Emerging Markets Index,” said Charles Worth, Executive Vice-President and Co-Chief Investment Officer at Nippon Capital AM. “If it does, we could have Western institutional investors putting a wall of money to work in the Chinese markets,” he added.

The firm says it sees the rally emulating that of the US markets which have remained stubbornly bid despite the emergence of evidence suggesting the economic recovery there may be faltering.

Nippon Capital AM says it is confident that inclusion in the MSCI Emerging markets Index will not only prove positive for the stocks in question but also for China insofar as its efforts to project a more open market economy.

About Nippon Capital AM
Nippon Capital Asset Management J-LLC is a ‘fee only’ financial advisory service. This way you can be assured that we are acting in your best interests at all times. Other services have ‘special’ relationships with banks and financial institutions, from which they are paid a negotiated percentage of any deals that they broker on their behalf. These third party arrangements distort how investments should be dealt with presenting a clear conflict of interest. We do NOT operate in this manner and offer total commitment to our valued clients, without receiving any compensation from third party sources in the industry.

Nippon Capital Asset Management J-LLC operates under the strict guidelines of the Fiduciary Standard of Care (FSC). We are bound to a code of conduct that holds the clients interest in paramount position.

Contact Nippon Capital AM:
1-1-43, Abenosuji, Abeno-Ku,
Osaka-Shi, Osaka Abenoharukas
24f Osaka
Japan