China Bull Story Solid Despite ‘Growing Pains’ Says Fidelity Fund Manager

The gyrations in the Chinese stock market may be scary, but don’t run away so fast. Bobby Bao, portfolio manager for the Fidelity China Region fund, said these are merely 'growing pains' which will soon pass. 'If you look at the size of the total margin debt outstanding in China it is 1.5 trillion renminbi. It’s not small, but to put things into perspective, the total household savings in the country is 63 trillion renminbi and total bank deposits are over 100 trillion renminbi,' said Bao. 'So while it creates a lot of short term noise, the long term fundamentals have not changed and we are seeing a lot of opportunities now.' The Fidelity China Region fund closed at $32 yesterday, still up 4% year-to-date, but down from almost $40 in late May. Shares of the fund have fallen approximately 7.5% in the past 12 months. Chinese stocks ended a five-day losing streak yesterday after the country's securities regulator enacted rules against selling certain stocks. The Shanghai Composite jumped 5.8%, nearly reversing a massive decline a day earlier. Bao applauded the move by Chinese authorities, calling it 'well-founded.'