LGIM's Perspective on China Economy and UK Gilts
LONDON (Reuters) - China still faces a very difficult economic situation and it is hard to be positive on the world's second-biggest economy just yet, Legal & General Investment Management's Chief Investment Officer Sonja Laud said on Monday.
China will adopt an "appropriately loose" monetary policy next year, the first easing of its stance in some 14 years, alongside a more proactive fiscal policy to spur economic growth, the Politburo was quoted as saying on Monday.
"You can't really stimulate away the excess in real estate that has been built over decades," Laud said at an LGIM outlook event with media.
"The domestic consumer cannot compensate for the weakness that we are seeing in particular unfold in the real estate space," she said, adding that potential U.S. tariffs were another headwind.
"We're not too positive on this."
Laud added that, separately, UK gilts offered value, with the UK budget now digested by markets and the Bank of England likely to continue lowering interest rates.
LGIM manages over a $1 trillion of assets.
(Reporting by Naomi Rovnick, Writing by Dhara Ranasingghe, Editing by Amanda Cooper)
