Attractive starting valuations abound for Chinese stocks
Investor sentiment of China is at absolute low, according to Platinum, leaving opportunities to pick up cheap stocks.
In the monthly Platinum Asia fund update, managers Andrew Clifford and Cameron Robertson said Chinese equities remained very cheap.
The fund had 44.1% allocated to China, more than four times the volume allocated to its second-largest geographic weighting which was South Korea at 8.4%.
Chinese holdings within the fund included Tencent, Ping An Insurance, Alibaba Group, industrial ZTO Express and real estate firm China Resources Land.
The pair said: “Sentiment towards China among global investors is at an absolute low point, in our view. The reality is that the Chinese economy continues to lumber along with strong earnings growth expected for its corporates, rumours of a property crisis receding (these were always vastly overblown) and officials in a position to offer moderate support in the form of interest rate and tax cuts.
“Most importantly, Chinese equities remain cheap and very under-owned by global investors. As such, we see China and the region as a whole as an important diversifier for investors and believe we are more than adequately compensated for political and sentiment risk by attractive starting valuations for very fine businesses.”
They added China lacked an inflation problem unlike other major developed economies, its consumer prices index rose by 0.9% over the 12 months to February 2022.
AUTHOR
Laura Dew
Recommended for you
In the latest Meet the Manager profile, Money Management speaks with Michael Skinner, founder and managing director at Blackwattle Investment Partners.
Perpetual has seen AUM rise 6 per cent in the last quarter but the departure of a longstanding JOHCM fund manager led to outflows of $2.2 billion from his strategy.
Global fixed income fund Bentham Global Opportunities has been added to several major platforms, enabling it to be accessed more easily by financial advisers.
Following yesterday’s news about First Sentier Investors closing four investment teams, a second global asset manager has announced it is closing its only dedicated Australian fund.
