Europe’s top money manager Amundi lends weight to Chinese stocks as market looks for sustained rebound
- Amundi sees room for constructive view on Chinese stocks as economy regains lost ground in second half
- Stocks in Hong Kong logged gains in May, reversing a multi-month slump triggered by Covid lockdown concerns
“Valuations are extremely attractive and have already priced in all the bad news on the fundamentals side,” said Alessia Berardi, head of emerging macro and strategy research at Amundi Institute, part of the Paris-based fund manager with US$2.17 trillion of assets. A shift towards stronger policy support “is clearly a trigger to become even more constructive”.
Investors were rewarded for turning bullish on the market after the Hang Seng Index jumped 1.5 per cent in May to halt a three-month slide. The Tech Index, which holds tremendous sway on market mood, climbed 0.3 per cent to reverse a 30 per cent cumulative loss in the past six months.
The MSCI China Index of 744 stocks trades at 10.1 times 2023 earnings, the cheapest since 2013 when they fetched 9.8 times, according to Bloomberg data. The gauge has declined 17.5 per cent this year, on top of a 21.6 per cent loss in 2021.
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Shanghai erupts in celebration as two-month Covid-19 lockdown comes to an end
The rebound last month may extend as optimism returned after Shanghai ended a two-month citywide lockdown on June 1, allowing carmakers like Tesla to scale up production and logistics players to repair supply-chain breakdowns. That could help recoup US$605 billion of market value lost from this year’s slump in Hong Kong.
