Global investors call time on their exodus from China
China's latest stimulus entices big investors back
Outflows from China funds are moderating, Lipper data show
Disconnect between China valuations and growth drive
By Naomi Rovnick
LONDON, Oct 1 (Reuters) -Global investors are preparing to stake bets on China again, in a major sentiment shift sparked by Beijing's drive to reverse its economic slowdown and revive long term interest in its stock markets.
It is early days and few money managers expect a Chinese growth boom anytime soon. But government moves to entice more cash into equities and jolt consumer spending have boosted the appeal of still-low Chinese company valuations, said investors at groups overseeing more than $1.5 trillion of client funds between them.
"We're going to be very disciplined but in aggregate we feel there's more upside than downside," said Gabriel Sacks, emerging market portfolio manager at Abrdn ABDN.L, which manages 506 billion pounds ($677 billion) of assets.
He said the group had bought China stocks "selectively" last week and would wait for more detailed policy plans from Beijing following some unusually candid economic support pledges that generated a sharp stock market rally in recent days.
China's factory activity shrank for a fifth straight month and the services sector slowed sharply in September, suggesting Beijing may need to move urgently to meet its 5% 2024 growth target.
PAST PEAK PESSIMISM?
Long term institutional investors mostly stayed on the sidelines last week as hedge funds sent Chinese stocks surging to cheer a stimulus bonanza, data sent to clients by Goldman Sachs strategist Scott Rubner showed.
Mutual funds' China equity holdings dwindled to 5.1% of portfolios, a decade low, in late August, Rubner said.
Chinese consumer confidence has taken hard knocks from a property crisis rooted in President Xi Jinping's moves to stop a pile of risky real estate debt estimated at more than $1 trillion from growing. Meanwhile, U.S.-China tensions have escalated.
But investors reckoned the tide was turning after Beijing authorities promised to spend as necessary to hit the 5% growth target. They also eased some home-buying restrictions, cut bank lending rates and offered brokers cheap funds to buy stocks.
"There's too much of a disconnect between what (Chinese stock) valuations are pricing in and that improving policy narrative," said Natasha Ebtehadj at Artemis Fund Managers.
She added that she had topped up her Chinese equity holdings in the last few days and taken some new positions.
RALLY ON?
Chinese stocks had their best daily gain since 2008 on Monday but investors cautioned against expecting more such blistering short term moves.
"This is a technical, liquidity driven rally," said George Efstathopoulos, a Singapore-based portfolio manager at Fidelity International, adding it was likely caused in part by short sellers unwinding bets on share price declines.
"There probably is a lot of short covering, there's probably a lot of hedge funds jumping in for short term returns," Abrdn's Sacks said.
Investors pulled a net $1.4 billion out of greater China equity funds tracked by Lipper so far in 2024, reversing all of the inflows from 2023, a year marked by un-met hopes for a consumer spending surge after strict COVID-19 lockdowns ended.
Efstathopoulos said he would wait for Chinese consumer confidence to rise before buying more Chinese stocks.
Mark Tinker, chief investment officer at Toscafund Hong Kong, a hedge fund, said Beijing's latest measures showed China might build sustainable household demand rather than chase quick growth with another property or infrastructure boom.
"Growth at 5% is not worth it if all you are doing is encouraging (more) destabilizing leverage," he said.
Luca Paolini, chief strategist at Pictet Asset Management, which oversees more than 260 billion euros ($291 billion) of client funds, said investors may have overlooked prospects of U.S. rate cuts boosting global demand and Chinese exports.
The U.S. Federal Reserve on Sept. 18 kicked off a long awaited monetary easing cycle with a hefty 50 basis points rate cut.
"What we are telling our clients this week is that if you have nothing (in China) you may want to add some positions," Paolini added.
Noel O'Halloran, chief investment officer of KBI Global Investors, said he began buying Chinese stocks this summer on valuation grounds and would not take profits yet.
"In terms of allocations to China, it's too early for many people to change their allocations but I think the direction can only go one way, which is up."
Outflows from China funds moderate as pessimism fades https://reut.rs/3BofCZL
China & Hong Kong stocks make a comeback https://reut.rs/3TQvYjX
CHINA-ECONOMY https://reut.rs/3BuLqvK
Reporting by Naomi Rovnick; editing by Dhara Ranasinghe and Christina Fincher
متعلقہ اثاثے
تازہ ترين خبريں
دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔
ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔
کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔
