Home Business Big reversal!This top foreign investor is bullish on A-shares and Hong Kong stocks begin to reflect foreign optimism

Big reversal!This top foreign investor is bullish on A-shares and Hong Kong stocks begin to reflect foreign optimism

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  UBS GroupThe suggestion for the Chinese stock market has been raised one step from a reduction to an increase. This is another large foreign investor who has recently turned to the A-share market.

As China’s economy takes the lead out of the impact of the epidemic and the economy is showing signs of slowing again, UBS’s strategyAnalystAfter McLeod maintained his pessimistic expectations for about a year and a half, his views have recently turned 180 degrees.

In a recent global market analysis report, he pointed out that China’s stock holdings turned from underweight to overweight mainly because the regulatory policy has passed the most severe period, and the tightening of economic policies and regulatory concerns have been reflected in the stock price. China’s economy will gradually improve next year, and the earnings of listed companies are expected to rebound, so they are bullish.

  180 degree steering

  At one time it was recommended to have a low allocation to China

Since the summer of 2020, UBS has been recommending underweight Chinese stocks.The reasons include the high valuation of the A-share market, and China’s economy is the first to recover and is facing contraction.currencyCompared with policies, the markets of other countries offer better prospects for cyclical recovery, and stock market valuations are also more attractive.

UBS pointed out that after 16 months of proposing to underweight Chinese stocks, it has now decided to withdraw the decision.Although austerity policies have had an impact on the entire Chinese economy, especially inreal estateThe sector has a greater impact; but at this stage, the policy and corresponding market prices are passing through the most austerity point. The poor performance of listed companies this year should rebound by 2022. In contrast, the cyclical growth trend in other parts of Asia will gradually fade, and the weak earnings of Chinese Internet stocks will gradually weaken.

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UBS predicts that China’s economic growth will gradually bottom out and gradually improve from now on. On the contrary, by 2022, global economic growth may gradually slow down, and the relative valuation of Chinese stocks has also reversed. The situation in 2022 should be better. In his view, the market’s concerns about China’s supervision are also a bit too much.

In another Chinese economic report released by UBS yesterday, the foreign investment suggested that in response to the recent adjustments in the Chinese market, pay attention to industries that meet policy expectations, such as green technology, 5G, and network security; at the same time, as the Chinese economy gradually changes After the epidemic returns to normal, it is also recommended to pay attention to durable consumer goods and services, as well as the energy sector.

In addition, UBS pointed out that from mid-2020 to mid-2021, the main global investment theme is to increase holdings of cyclical stocks, but now this trend has begun to decline, and it is recommended to gradually move away from this trend.

Since the middle of this year, with various cyclical data and stock valuations reaching high levels, UBS has been gradually lowering this expectation. Raw materials are one of its least favored cyclical sectors, and UBS has reduced Australian stocks to underweight. In comparison, it favors Southeast Asian stocks more than most other Asian markets, saying it is optimistic about the potential of ASEAN. The Japanese and South Korean stock markets remain neutral.

At the beginning of this year, UBS strongly favored the ASEAN rather than the Chinese market. However, the impact of the virus variants is superimposed on the slower vaccination, and it took a while for the ASEAN market to start showing performance. UBS still believes that ASEAN still has room for performance in the short term.

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  Organizations frequently see more

  Hong Kong stocks begin to reflect foreign optimism

As investors speculate that the most serious regulatory policies may have passed, and some stocks have shown bullish technical patterns, sentiment in the Hong Kong stock market has improved significantly in recent weeks.

First of all, Internet stocks have rebounded significantly, and the market is optimistic about the follow-up policy expectations. October was a sharp turning point in market sentiment. The fines imposed by the food delivery giant Meituan were less than expected, which was regarded as an optimistic signal by foreign investors.

The poor performance of the market this year has provided more room for a rebound. In the fourth quarter, institutions were more optimistic about the Hong Kong stock market. From the market reaction,Hang Seng China EnterpriseThe index has risen 10% since closing at a five-year low on October 6.AlibabaHong Kong stocks rebounded by 30% over the same period, and rose nearly 7% on October 20.

Secondly, a number of top foreign institutions have recently voiced their bullishness on Chinese stocks.At the end of September this year, the world’s largest asset managerBlackRockThe reason for this institution’s bullishness from neutral to long A-shares is that it believes that the macro environment facing the Chinese market will change, and that the low valuation allows the risk of stocks to be compensated.FidelityA report issued by the International earlier this month stated that the Chinese stock market provides “in-depth value investment opportunities.”

(Article source: ChinafundNewspaper)

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