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Chinese tech shares may have some 'breathing room': Credit Suisse
Time to start investing?
"Even after the rebound we still see valuation as attractive," Jack Siu, chief investment officer of Greater China at Credit Suisse, told CNBC's "Street Signs Asia" on Friday.
Prior to the recent bounce in China's markets, valuations had been at close to 10-year lows, Siu said.
"It's going to be volatile, but it's time to start dipping our toes in," he said
The stock markets have priced in sufficient risk premium on issues such as Covid in China and lingering concerns over the real estate market, he added.
Investable but be careful
Management consultant Richard Martin, on the other hand, warned that China is "investable but as a policy-controlled market."
Read more about China from CNBC Pro
Any market that falls around 30% in 10 days due to policy and geopolitical concerns — and then bounces back after the announcement of government support, is driven by policy and not the value or performance of its companies, said Martin, who is managing director at IMA Asia.
"You can invest.Just make sure you've understood the political/policy winds," Martin said.
'Tough road ahead'
Meanwhile, Michael Yoshikami from Destination Wealth Management said it will be a "tough road ahead" for Chinese firms as the regulatory environment remains uncertain.
"Just because they say they're going to have some sort of foundation built for Chinese stocks, I still think the Chinese government wants things stabilized," said Yoshikami, founder and CEO at the firm. "It's still going to be pretty active, and I think investors should be pretty cautious of the China sector right now."
Investors are now also watching for moves on the policy front in China as Beijing seeks to meet its gross domestic product growth target of about 5.5% for 2022.
On Monday. the central bank left the benchmark lending rate unchanged.
"We expect China's policymakers to be proactive in supporting growth from here. On the macro front, in the coming weeks we now expect both an interest rate cut and a reduction to the reserve requirement ratio (RRR) for banks, as well as a strong increase in fiscal spending support for the economy," Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, in a Tuesday note.
RRR refers to the amount of funds banks need to hold in reserve.
— CNBC's Evelyn Cheng contributed to this report.
FAQs
China's growth rate may be slowing following years of breakneck expansion, but it is forecast to significantly outperform most developed markets in 2023. 'Looking at the short-term, China is the only major economy that is going to grow meaningfully from a low base this year.
Is it a good time to invest in China now? ›
China's growth rate may be slowing following years of breakneck expansion, but it is forecast to significantly outperform most developed markets in 2023. 'Looking at the short-term, China is the only major economy that is going to grow meaningfully from a low base this year.
Is China a risky investment? ›
The bottom line for many foreign fund managers is that the risk of investing in Chinese securities has soared over the past year and the returns have not kept up. Those returns are out of reach because of the country's economic doldrums and anemic corporate profits.
What is the market prediction for China? ›
S&P now expects China to log GDP growth of 5.2% in 2023, down from an earlier estimate of 5.5%. It was the first time a global credit ratings agency has cut China's forecast this year but follows lowered predictions by major investment banks including Goldman Sachs.
Which Chinese stocks are at risk of delisting? ›
More than 100 Chinese companies — including Alibaba, JD.com, and Baidu — had been identified by the US securities regulator as facing delisting in 2024 if they did not hand over the audits of their financial statements.
Why are Chinese shares falling? ›
China, Hong Kong shares down after weak economic data; analysts lower growth view. China and Hong Kong stocks fell on Tuesday after weak economic data disappointed investors, while a raft of sell-side analysts lowered their full-year growth forecast for the world's second-largest economy.
Is China's economy good right now? ›
Economic Survey of China 2022
China's economy has strongly rebounded from the deep dive following the COVID-19 outbreak and has returned to its gradually slowing path.
Is China on the verge of a financial crisis? ›
About a third of local authorities are struggling to make payments on debts, according to a recent survey. The distress threatens government services, and is already provoking protests. Defaults could bring chaos to China's bond markets.
Is China a threat to the US economy? ›
The counterintelligence and economic espionage efforts emanating from the government of China and the Chinese Communist Party are a grave threat to the economic well-being and democratic values of the United States. Confronting this threat is the FBI's top counterintelligence priority.
Why are investors avoiding China? ›
Investors trimmed their exposure to China amid economic uncertainty in the country, rising geopolitical tensions and Beijing's crackdown on international consulting firms.
Invest in China for positive impact on global markets
One of the key reasons to invest in China, as Keith Wade, Chief Economist at Schroders points out, is that the country's economic growth would positively affect the rest of the world. “Faster growth in China mechanistically raises our global forecast.
What is the market outlook for China in 2023? ›
China | 2023 RMB Exchange Rate Outlook
RMB to USD exchange rate has cumulatively depreciated by 8% in 2023, amid expectation change of the US FED hike path. Look forward, we predict RMB to go back to around 7-7.1 at end-2023 and 6.7 at end-2024.
Is it good to invest in China market? ›
Key Takeaways
China's urbanization, which is expected to continue past 2030, has led to its impressive economic growth. Some of the risks associated with investing in China include its communist structure, regulatory differences, and insider trading.
Is US going to delist Chinese stocks? ›
US officials said they gained sufficient access to audit documents on companies in China and Hong Kong for the first time, a breakthrough that removes the acute threat of delisting for about 200 companies on New York exchanges.
Will US delist Chinese stocks? ›
More than 100 Chinese tech companies such as Alibaba , Baidu and JD.com had faced the risk of delisting in the U.S. in 2024 if their audit information was not made available to PCAOB inspectors. Investors often grapple with a lack of transparency into Chinese stocks. “It will allow institutional investors to come back.
What Chinese companies are pulling out of the US? ›
Five of China's largest state-owned companies announced plans to delist from US exchanges as the two countries struggle to come to an agreement allowing American regulators to inspect audits of Chinese businesses. China Life Insurance Co., PetroChina Co. and China Petroleum & Chemical Corp.
What is the best Chinese stock to buy right now? ›
Comparison Results
| Name | Price | Analyst Price Target |
|---|
| NIO Nio | $10.58 | $10.38 (-1.89% Downside) |
| BILI Bilibili | $15.46 | $20.48 (32.47% Upside) |
| TCOM Trip.com Group Ltd. Sponsored ADR | $36.71 | $46.17 (25.77% Upside) |
| SOHU Sohu | $11.01 | $18.00 (63.49% Upside) |
5 more rowsTop Chinese Stocks To Buy Or Watch
| Company | Ticker | Industry Group |
|---|
| BYD | BYDDF | Auto Manufacturers |
| Trip.com | TCOM | Leisure-Travel booking |
| Baidu | BIDU | Internet-Content |
| Alibaba | BABA | Retail-Internet |
1 more row3 days ago
The answer – yes. The Yuan is strong and there are no signs of weakness in sight. The American Dollar is having issues trying to stay afloat and the Chinese are capitalizing – as they always have. For more information about forex trading, try our Stock Market course.
