Sat Duhra of Janus Henderson Investors has been adding to positions in mainland Chinese shares, including in the renewable-energy infrastructure and water sectors, on attractive valuations and as they will be paying out dividends in June and July.

The Singapore-based portfolio manager is investing in Asian companies with dividend yields of around 6-8%. It “is a decent spread over bond yields and provides some protection in a period of heightened volatility,” he said.

Pricing Power
HSBC Holdings Plc has a list of stocks that tend to do well even in a weak macroeconomic environment, said Herald van der Linde, head of APAC equity strategy. “These stocks can do that because their businesses have pricing power, or they operate in a special niche or are key players in highly concentrated markets.”

Meanwhile, now that Asian economies are reopening, JPMorgan Asset Management sees the outlook for domestic demand improving in the region. Current earnings forecasts for Asian equities seem “too conservative for 2022 and valuation is also attractive once market sentiment improves,” wrote Tai Hui, Asia chief market strategist, in a note.

Mirabaud & Cie SA is also finding opportunities in stocks with pricing power, such as Sika AG, Geberit AG and Givaudan SA, said John Plassard, a director at the firm.

“With equity returns essentially bimodal and largely recession dependent, we focus on relative value opportunities and reassess our preferred themes and related screens,” UBS Group AG strategists including Keith Parker wrote in a note.

They are focusing on pricing power, stocks with higher and improving quality as well as shares exposed to high-income consumers.

“Some of the consumer staples companies are holding up given price elasticity for the strong brands,” said Louise Dudley, portfolio manager at Federated Hermes. Stocks with stable dividend policies are havens and there’s value in health care and energy, she said.

Fabio Caldato, a partner at Olympia Wealth Management, also “built a decent bulk of healthcare companies and we are still buyers of the sector, with a strong focus on big European pharma” like GSK Plc and Sanofi.

Wells Fargo strategists including Christopher P. Harvey said in a note they screened for long ideas, using history as a guide for a recession portfolio that includes names like Comcast Corp., Coca-Cola Co. and International Business Machines Corp.