Optimistic on the Chinese market: Tyche Group

Q: But how do you take into consideration the China’s consumer price inflation numbers, which have stayed near 12-year highs?

A: We had this inflation numbers out over the holidays and it is at 11-year high. We had 8.5% in April for the consumer’s prices and that indeed is something to watch because people who like to gain exposure to the Renminbi as that is the currency that is the most undervalued and has the most appreciating potential.

Now the problem for the investors is that the inflation is much higher than the interest one gets on bank deposits. So this inflation is why we recommend for China exposure to actually go for equities.

Q: A quick word on the rest of the Asian pack, which seems to be doing quite okay this morning?

A: Yes, generally our view remains that the big financial crisis that is getting worse in the US, is the US and the European financial crisis and the Asian consumer markets are still under estimated by global investors and we like the Asian markets, although we always say hedge your position with gold as a financial crisis protection.