"Asian stock markets have suffered declines this year in response to fears of a global recession. However, I believe China will be able to weather the effects of a global economic slowdown as the domestic economy remains well-supported and, in addition, company balance sheets are healthy", says Philip Ehrmann, manager of the Jupiter China and Jupiter Asian Funds.

He continues: "Share price volatility has been further exacerbated by the Chinese government's recent actions aimed at curbing inflation.  Nevertheless, a combination of strong balance sheets, robust productivity and a steadily appreciating currency should partially offset this.

"We do not believe the long term secular growth trend in China will become derailed by the problems in the US, as growth is being driven by a process of massive urbanisation.  The Chinese government will continue spending significant sums on infrastructure to deal with the inevitable social chaos caused by mass migration.  Environmental spending is another government objective that throws up interesting opportunities.

"At a company level, managements are becoming increasingly open and shareholder friendly, with better websites and improved corporate governance.  It is also encouraging to see company managements paying attention to growth and profit, moving away from the 'profitless growth' of the recent past.

"As a result of these factors, we remain positive on the outlook for Chinese companies.  We are taking advantage of the fact that share prices have pulled back to levels not seen for 18 months to build up positions in stocks where we have high conviction.  These include: Shandong Weigao, one of China's leading medical product companies and Minth, China's most successful auto component product manufacturer and Bejing Capital Land, an established property developer. We continue to focus on mid cap growth companies for the China Fund, in contrast to the very large companies that have been garnering most investor attention.

 "Elsewhere in Asia, we are seeing opportunities in Indian equities following a 15% correction in the MSCI India.  Until recently, the Jupiter Asian Fund has had low exposure to the Indian market, but the recent correction has provided an attractive entry point and we have consequently built positions in a number of the country's leading companies including Bharti Airtel, India's leading mobile telephone operator."

- ENDS -

NOTE

Jupiter Unit Trust Managers Limited (JUTM) and Jupiter Asset Management Limited (JAM) are both authorised and regulated by the Financial Services Authority and their registered address is 1 Grosvenor Place London SW1X 7JJ. The group is collectively known as "Jupiter". The above commentary represents the views of the Fund Manager at the time of preparation and may be subject to change. They are not necessarily those of Jupiter and should not be interpreted as investment advice. Past Performance should not be seen as a guide to future returns, the value of an investment and the income from it can fall as well as rise and may be affected by exchange rate variations. Every effort is made to ensure the accuracy of any information provided but no assurances or warranties are given.