China Pacific Insurance says coronavirus-battered cyclical stocks are good bets due to growth potential
- Insurer likes shares of financial and energy companies, which were clobbered due to Covid-19
- China is encouraging consumer spending to help the country dig its way out of an economic slump
China Pacific Insurance is betting on beaten-down cyclical stocks traded in the mainland and Hong Kong markets, contending they have long-term growth potential as the mainland economy recovers from the coronavirus pandemic.
Finance and energy companies, whose shares were clobbered in the early period of the coronavirus pandemic, have turned out to be good picks, said Fu Fan, president of the mainland’s fourth-largest insurer.
Consumer stocks, such as liquor, clothing and daily necessities makers, are being closely watched by the company because they would become good buys if corrections were to set in.
“We have strengthened our research to find companies which turned out to be good buys after panic selling,” he told reporters on the sidelines of the Lujiazui Forum in Shanghai on Friday, without offering specific names. “The volatility created great opportunities for us to buy low.”
Energy and financial stocks are the worst-performing sectors on China’s CSI 300 Index this year, falling at least 13 per cent.
By comparison, the CSI 300 of large caps trading on the mainland is down 0.5 per cent in 2020.
