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Diane Lin, Fund Manager at Pengana Capital agrees, adding that the biggest concern at the moment is a risk of a delayed response from the Chinese government that could lead to a further weakening of the economy and earnings.
Other economic indicators released alongside the GDP data pointed to a pick-up in growth. China’s fixed asset investment, which is watched as an indicator of construction activity, grew 20.4 percent in the year to June, compared to expectations for a rise of 20 percent.
Kowalczyk says that while the People’s Bank of China (PBoC) is unlikely to cut interest rates further this year, he forecasts the central bank will engage in further reserve ratio requirement cuts as well as fiscal measures.
China’s central bank last week cut interest rates for the second time in two months to bolster its economy.
Kowalczyk believes policies implemented will suffice to bring up economic activity in the second-half, adding that his target is for 8 percent growth in 2012.
“This is good news for Chinese equities in the medium-term, as well as for the yuan, which we expect to appreciate in the second-half.”
For investors looking to gain exposure to mainland equities, Lin recommends picking companies that could provide long-term growth.
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