Opportunities amid correction
Fund houses are hunting for attractively-priced China stocks following the steep correction.
Sources believe Hong Kong-listed Chinese equities look most favourable. H-shares have been hit hard recently due to the spillover effect from the falling A-share market and concerns over Greece staying in the Eurozone.
“The recent panic-selling in the Hong Kong stock market has created a good buying opportunity for longer-term investors,” said Lo, from Schroders.
“We see more value in Hong Kong-listed China stocks for longer-term investors as their valuation has become attractive after the recent correction,” said Lo.
The Hong Kong stock market is more institutionalised and disciplined than the onshore market, she added. BlackRock Asset Management said it remains relatively cautious on A-shares and believes valuations are stretched, especially in small- and mid-caps.
Instead, the firm is selectively investing in H-shares, which the fund house believes are still attractively valued on an absolute basis and relative to regional and global peers. BlackRock has also warmed to Macau stocks.
“We are growing more positive on Macau as the government eases visa restrictions for mainland transit visitors.
Since last year, the policy has been restrictive and had a negative impact on the gross gaming revenue (GGR),” the firm said in a recent research note.
“The relaxation of the transit visa policy should provide the GGR a medium-term boost and to investors a signal that the restrictive policy cycle is ending.”
