(Feng Sung pictured left) Sung said it was difficult to predict the results of the tests, which are due to be published tomorrow, Friday 23 July, but said China could not ignore what else is happening in the rest of the world. "A lot of China's exports still go to Europe as well as the US and I do not believe in the decoupling theory. Tomorrow will be quite important and I think it will need to be monitored to see how the market reacts,” he said.
"You have to remember the euro has been very weak year-to-date and China has already appreciated its currency using a managed float against the US dollar. It has already appreciated 12-13 per cent, which means that exports from China are getting more expensive for Europeans, so this will potentially affect its exports market."
“If the stress test comes out and it is negative it could have further damaging implications on the euro, which would not be good for China’s exports, but I am hoping that things are not as bad as people are talking about and that there is more stability in the market.”
Data from Financial Express showed there are eleven IMA UT and OEIC defined funds which have exposure to both China and banks.
China and banks
Source: Financial Express Analytics
The best performing fund over a one year period to 21 July 2010 was the Franklin Templeton Templeton Asian Growth fund which returned 38.64 per cent. The fund has a 22.84 per cent weighting to China and a 13.56 per cent weighting to banks.