The Beijing Olympics could result in a renaissance among crunch-hit Chinese stocks - although analysts are advising investors to be cautious.
With the eyes of the world on China many small investors are considering whether or not to put money into stocks in the Asian nation, the Times reports.
This is partly because the Beijing Olympic games is likely to have a very beneficial effect on Chinese stock markets. Previous figures show that equities jump by an average 28 percent for host nations in the year after a games.
However, over recent years, shares in Chinese companies have performed surprisingly poorly, when the nation's rapid growth is taken into account. The MSCI China index, for example, has risen at an annual average of just six percent over the last decade and a half.
The credit crunch has also taken its toll, with around 50 percent having been wiped off the value of Chinese stocks so far in 2008 and GDP growth declining to a near three-year low of 10.1 percent for the second quarter.
Speaking to the newsapaper, Mark Mobius, executive chairman at Templeton Asset Management, said: "Most emerging markets have declined recently as investors have adopted a more cautious approach. Concerns about slowing global economic growth and rising inflation remained at the forefront."
Hugo Young at Aberdeen Asset Management Asia added that the regulatory environment in China also discourages investors from putting money into stocks. "Having been concerned about a bubble in the Chinese market and unexcited about valuations for several years, our appetite is starting to be whetted after the recent sharp falls," he commented.
"However, we continue to prefer to gain exposure through those Chinese companies listed in Hong Kong, where standards of accounting and transparency are better than those of their mainland counterparts."
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