St. Patrick’s cheer for Gartmore Irish Growth Fund

St. Patrick’s Day is an occasion to celebrate all things Irish and an opportune time to reflect on the strength of the Gartmore Irish Growth Fund plc (GIGF).

The Irish market continues to power ahead, and has outperformed other international markets by a decent margin. Real GDP in 2007 of around 5.5% is widely forecast, according to Gervais Williams, Manager of the Gartmore Irish Growth Fund plc. Since inception in June 1995, GIGF has achieved a blistering 910.6%.

“A key engine of growth for Ireland is the National Development Plan (2007-2013) or NDP. A significant element of the NDP will involve spending on infrastructure. The NDP has four basic objectives to continue sustainable national economic and employment growth, and to strengthen and improve Ireland’s international competitiveness. Other goals are to foster balanced regional development and to promote social inclusion.

“The Irish market offers a significant number of attractive investment opportunities. These include Ryanair, which is well positioned to enjoy favourable trading conditions, given the very limited supply of short-haul aircraft in Europe. Food-related stocks are returning to favour. The scope for increased inflation in food products should enhance prospects for some of these businesses. In the land of the little people, there are also a number of leprechaun micro caps, which offer attractive investment opportunities. Among these is Island Oil & Gas, the independent exploration and production company, which has gained a large percentage of highly prospective acreage in the Atlantic Margins and the Celtic Sea.”

Impact of Chinese Tax Unification

Charlie Awdry, Manager of the Gartmore China Opportunities Fund, believes that Chinese companies will benefit from the planned equalisation of tax rates paid by local and overseas enterprises. “The Standing Committee of the National People’s Congress discussed and approved a change in the law at the annual National People’s Congress in Beijing in March. The change, which is due to come into effect in 2008, will introduce a single 25% tax rate to replace the 33% band in place for Chinese companies and the 15% rate established for foreign enterprises.

“This move is another illustration of the authorities’ economic reform programme. Initial research suggests that sectors dominated by domestic heavyweights such as banks, telecoms and energy will receive a one-off profits boost of somewhere between 5 to 10% in 2008 as a result.” Finance Minister Jin Renquing says the move is important to establish a ‘unified market with standard and fair competition.’ There will be a transitional period lasting five years to phase in the change, and still be lower concessional rates for high technology projects and low profit enterprises.