China’s market stabilising measures ‘steps in the right direction’ to end slump, UK fund manager Abrdn says
- China’s liquidity injection will help repair fragile sentiment towards the world’s second largest equity market, global CEO of investments Buehlmann says
- Valuations are ‘very attractive’ and in the longer run, there is ‘definitely upside potential’ for the markets: Abrdn
China’s latest efforts to prop up the stock market are set to lift investor confidence and stock valuations, according to UK asset manager Abrdn. More policy consistency from the top leadership over time could help restore stability after a slump this month.
The central bank’s unexpected liquidity injection plan and Premier Li Qiang’s pledge for more stabilising measures are all “steps in the right direction”, which will help put a floor under the fragile sentiment towards the world’s second largest equity market, said Rene Buehlmann, global CEO of investments at Abrdn.
“They have been very clear that they want to restore confidence in the financial markets,” he said in an interview with the Post in Hong Kong on Wednesday. The UK firm managed about £495 billion (US$630 billion) in assets globally at the end of 2023. “The government has been quite consistent on this,” which is key to attracting international investors back into the market, he added.
His optimism comes after Beijing ramped up efforts this week to stabilise the capital market and stem the stock rout that has wiped out over US$1 trillion this year amid disappointment over policy support for the struggling economy.
The MSCI China Index has rebounded 6.3 per cent after sliding to the lowest level since October 2022 on Monday. The two-day rally has helped restore US$434 billion in market value to Chinese stocks listed in Shanghai, Shenzhen, Hong Kong and New York, according to Bloomberg data.
