Aug 5 (Reuters) – The market impact of the recent Chinese regulatory crackdown on companies is factored in, making equities relatively attractive compared to their European and US peers, a portfolio manager at Legal said and General Investment Management (LGIM).
“We haven’t changed our overall view of China,” said Justin Onuekwusi, head of retail multi-asset funds at LGIM, even as the recent government crackdown on the real estate, tech and of education left his company “surprised”.
LGIM continues to hold Chinese stocks, believing that they represent better value at current levels than European and US alternatives.
“Our overall view is that since Chinese stocks are already at a depressed level, the foam in the market is on US and European stocks,” Onuekwusi told the Reuters Global Markets Forum on Wednesday.
A possible decline in Chinese growth would hit German and US stocks more than their Chinese counterparts, said Onuekwusi, whose company oversees 1.3 trillion pounds ($ 1.8 trillion) in assets.
AIA Group CIO, Mark Konyn, also expressed at the Forum a positive outlook on China, due to long-term structural growth and its commitment to opening up its financial markets to foreign investors.
Meanwhile, Onuekwusi said Australian, New Zealand and South Korean bonds were attractive due to steeper yield curves, adding that the vaccine’s effectiveness against COVID-19 variants was a key risk for them. markets around the world.
He expects the Australian dollar to return as a carry trade favorite in the medium term, although it faces short-term risks from the slowdown in the Chinese economy and its impact on Australian exports. .
In the shorter term, “all eyes are on Jackson Hole,” said Onuekwusi, whose base case is Fed Chairman Jerome Powell, adopting a “very strongly” accommodating tone at the annual gathering of central bankers. . (This interview was conducted in the Reuters Global Markets Forum chat room on Refinitiv Messenger. Join GMF: refini.tv/33uoFoQ) ($ 1 = 0.7199 pounds)
Reporting by Aaron Saldanha and Lisa Mattackal in Bengaluru Additional reporting by Supriya Rangarajan Editing by Divya Chowdhury and Mark Potter