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
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آخر الأخبار
إخلاء المسؤولية: تتيح كيانات XM Group خدمة تنفيذية فقط والدخول إلى منصة تداولنا عبر الإنترنت، مما يسمح للشخص بمشاهدة و/أو استخدام المحتوى المتاح على موقع الويب أو عن طريقه، وهذا المحتوى لا يراد به التغيير أو التوسع عن ذلك. يخضع هذا الدخول والاستخدام دائماً لما يلي: (1) الشروط والأحكام؛ (2) تحذيرات المخاطر؛ (3) إخلاء المسؤولية الكامل. لذلك يُقدم هذا المحتوى على أنه ليس أكثر من معلومات عامة. تحديداً، يرجى الانتباه إلى أن المحتوى المتاح على منصة تداولنا عبر الإنترنت ليس طلباً أو عرضاً لدخول أي معاملات في الأسواق المالية. التداول في أي سوق مالي به مخاطرة عالية برأس مالك.
جميع المواد المنشورة على منصة تداولنا مخصصة للأغراض التعليمية/المعلوماتية فقط ولا تحتوي - ولا ينبغي اعتبار أنها تحتوي - على نصائح أو توصيات مالية أو ضريبية أو تجارية، أو سجلاً لأسعار تداولنا، أو عرضاً أو طلباً لأي معاملة في أي صكوك مالية أو عروض ترويجية مالية لا داعي لها.
أي محتوى تابع للغير بالإضافة إلى المحتوى الذي أعدته XM، مثل الآراء، والأخبار، والأبحاث، والتحليلات والأسعار وغيرها من المعلومات أو روابط مواقع تابعة للغير وواردة في هذا الموقع تُقدم لك "كما هي"، كتعليق عام على السوق ولا تعتبر نصيحة استثمارية. يجب ألا يُفسر أي محتوى على أنه بحث استثماري، وأن تلاحظ وتقبل أن المحتوى غير مُعدٍ وفقاً للمتطلبات القانونية المصممة لتعزيز استقلالية البحث الاستثماري، وبالتالي، فهو بمثابة تواصل تسويقي بموجب القوانين واللوائح ذات الصلة. فضلاً تأكد من أنك قد قرأت وفهمت الإخطار بالبحوث الاستثمارية غير المستقلة والتحذير من مخاطر المعلومات السابقة، والذي يمكنك الاطلاع عليه هنا.
