Investors buy, then bide time on China
Nearly 1/3 of Asia fund managers are buyers - BofA survey
Fiscal stimulus seen as trigger for further gains
Tech sector preferred
By Tom Westbrook, Dhara Ranasinghe and Naomi Rovnick
SINGAPORE/LONDON, Oct 18 (Reuters) -Global investors are buying China and betting last month's rally has legs, but few are willing to go large until there are far more concrete signs that the economy and earnings will improve.
The sentiment shift has been fast and furious, spurring billions of investor cash that had been diverted to India and Japan rushing back to bring China exposures from near record lows towards neutral or market-weight.
In just a month, the proportion of Asia fund managers building exposure in China jumped from 8% to 31%, according to a Bank of America survey published in mid-October,and the percentage of managers looking outside China for opportunities collapsed by a similar margin.
Yet markets have already pulled back 10% from the rally's highs thus far and third-quarter gross domestic product data on Friday showed the economy grew at the slowest pace since early 2023, leaving investors preparing to wait it out.
"The real crux of a second-leg higher in shares is if the government is able to stimulate consumer demand," said Willem Sels, global chief investment officer at HSBC Global Private Banking and Wealth.
"We think there will be more details coming through and the market is looking for a number on the size of fiscal stimulus to get excited. If we get that, then there is more room for another rise in stocks. We are still neutral."
China no longer publishes timely data showing money moving in and out of its equity markets but ebbing turnover and momentum point to investors giving the latest stimulus efforts the benefit of the doubt.
Cash that poured into U.S.-listed exchange-traded funds that invest in China has mostly stayed there, after the initial rush.
"People are still observing - there's no immediate profit-taking positions," said Henry Wu, head of Xtrackers U.S. products at DWS in New York, where the Xtrackers Harvest CSI 300 ASHR.N has drawn more than $2.2 billion in inflows since late September. "Investors are here to wait and see."
'BETTER LATE THAN WRONG'
Foreigners say that tech and e-commerce companies are attractive, with the latter exposed to improvement in consumption and offering a margin of safety in being both relatively cheap and generating a lot of cash.
"They were penalised for several years both for reality and perception reasons about government policies and regulations," said Nate Thooft, CIO for multi-asset at Manulife Investment Management.
"But our impression is that this time around China policymakerswant tohelp the market, and I think they're going to be less restrictive and ... some of the gap in valuation between equivalent country companies in the tech space could close."
Most are leaving real estate, where one-time powerhouse developers are cheap and swing wildly, to bolder speculators.
To be sure, there are plenty of investors wary of geopolitical risks or China's regulatory rollercoaster who have walked away from the mainland markets for good andothers who are sceptical about how strongly the economy can rebound.
Still, the mood has moved from aversion to China's stock market to watching, waiting, and gradually buying.
"We are not speculators, we are building an investment case," said Benjamin Melman, chief investment officer at Edmond de Rothschild Asset Management, which has held a neutral position on China for more than a year.
"It is better to be late than wrong."
China economy snapshot https://reut.rs/48aIbWG
Reporting by Dhara Ranasinghe, Naomi Rovnick and Alun John in London; Writing and additional reporting by Tom Westbrook in Singapore; Editing by Kim Coghill
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.
