Citywire AA-rated Jian Shi Cortesi
Portfolio manager, Asian and China equities
Valuations of Chinese equities have become cheaper after the recent correction, although they are still above the levels seen at previous market bottoms.
Any further downside could offer good opportunities to buy consumer discretionary, insurance and technology stocks.
The best place to invest in China is within sectors benefiting disproportionately from China’s evolution towards a consumer driven economy. In particular, I favour technology, healthcare, financial services and the broad consumer space.
However, there are plenty of concerns that keep investors in a cautious mood. These include the US tariffs, softer Chinese economic data, tighter financial regulations in China, as well as the US dollar strength and renminbi or emerging markets currency weakness.
Meanwhile, uncertainties related to Turkey is also a concern.
In addition to the US-China trade tension, the key risk to monitor in China is whether business confidence will hold up and whether corporate earnings growth will decelerate in face of tighter domestic financial regulations and uncertain external demand.