China’s Stocks
For CEB International Investment Corp., now’s a good time to buy so-called new economy stocks in China including tech despite the regulatory risk there. “Lots of people one year ago thought this thing would be pushed like a more backward cycle for all the tech stocks,” said Banny Lam, head of research. “I am really positive about this sector, and in the second half of this year.”
Goldman Sachs Group Inc., meanwhile, remains bullish on China stocks as the government is easing overall policies, and it says the nation’s internet shares are still trading below their intrinsic value, strategists including Kinger Lau wrote in note.
Valuation gap between Chinese shares and global peers still extensive
Pictet Asset Management recently sold its China positions again because the zero Covid-19 policy is “too risky” and is underweight equities across the board right now in terms of geographies, said Frederic Rollin, senior investment adviser at the firm.
Investment-Grade Bonds
High-rated bonds strike a good balance between income generation and resilience against slowdown concerns, according to JPMorgan’s Tai Hui. While a short-term challenge for fixed income is risk from duration -- a measure of debt price’s sensitivity to interest-rate moves, income generated from government and corporate notes offers a better cushion to offset price volatility from rising rates.
“Now is the time to start re-building fixed income exposure” as central bank tightening anchors long-term inflation expectations, said Nannette Hechler-Fayd’herbe, chief investment officer of international wealth management and global head economics and research at Credit Suisse Group AG.
“Core government bonds and high grade corporate credits are offering decent yields now and emerging market hard currency bonds (for example in USD) are outright attractive,” she said.
--With assistance from Chloe Lo, Sagarika Jaisinghani, Albertina Torsoli, Farah Elbahrawy, Allegra Catelli and Chiara Remondini.
This article was provided by Bloomberg News.