BlackRock Fund’s Chief Investment Officer, Lu Wenjie, has expressed optimism for the excess returns of China’s equity market in the upcoming Year of the Dragon. In an exclusive interview with The Paper, Lu Wenjie shared his outlook for the A-share market in 2024 and highlighted key investment themes and sectors worth looking forward to.
In his view, China’s economy is expected to recover moderately in 2024 with policy support, leading to the restoration of profits for outstanding companies. Lu Wenjie emphasized that companies with the logic of going overseas may exhibit growth highlights under the global macro pattern in the new year. Furthermore, he mentioned that high-quality stock assets have achieved cost-effective valuations, making the excess returns in the equity market worth anticipating.
Amid the current economic situation and inflation challenges, Lu Wenjie expects the equity market in 2024 to be dominated by structural opportunities, focusing on investment directions such as companies going overseas, technological innovation, and high dividends.
Specifically, Lu Wenjie highlighted the stabilization and recovery of China’s exports and the expected highlight of exports becoming a key driver of domestic economic growth in 2024. He also emphasized the significance of technological innovation as a potential growth point, citing the structural trend formed by the rise of artificial intelligence on a global scale.
Additionally, Lu Wenjie underscored the value of high-dividend asset allocation in the current monetary environment, stating that high-dividend assets have high allocation value and relatively stable returns in the context of a reasonably loose domestic monetary environment.
When discussing overseas macro markets, Lu Wenjie cited the BlackRock think tank’s optimism about the Japanese stock market and the preference for emerging market assets over developed market assets. He highlighted the importance of managing macro risks, actively adjusting investment portfolios, and seizing opportunities under disruptive trends as key global investment themes for 2024.
In conclusion, Lu Wenjie’s insights provide a comprehensive perspective on the potential opportunities and challenges in the A-share market for the Year of the Dragon. Investors and market participants can leverage his outlook to make informed decisions and navigate the evolving landscape of the equity market.