Somerset's Lam: China set to devalue renminbi

The manager of the £763m Somerset Emerging Markets Dividend Growth fund said he expects the Chinese authorities will eventually take action to weaken the renminbi by buying dollars, which would be good news for the country's exporters. "I am still of the view they may well devalue the currency, and that to me is the most logical solution to their problems," the manager said. "When they try to ease by pumping money into the system or lowering interest rates, capital flows just go into London property or US stocks. Devaluation would ease monetary conditions, but prevent capital flight, ...