antiterror13
Brigadier
What is "PC" ?
Chinese Economics Thread
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What is "PC" ?
Global investment banks go long on Chinese assets amid global volatility, underpinning China's lead in new energy
Country seen as an investable equity safe haven amid intl woes
By GT staff reporters Published: Jul 08, 2022 09:57 PM
Illustration: VCG
An increasing number of global investment banks including Goldman Sachs and JPMorgan Chase & Co have lately rooted for Chinese assets, seeing the country as an investable equity safe haven amid woes over a recession brewing in the US.
Behind Chinese assets' outperformance was an effective pro-growth push over recent months that has stabilized the economy and prompted a turnaround in investor sentiment, market watchers said, anticipating that Chinese assets will remain appealing to international investors.
Such a positive scenario bodes well for listed firms, notably those in the new energy sector, seeking to bankroll their expansion, thereby consolidating the country's leadership in clean energy, analysts reckoned.
Since last January, Asia, not including China, has posted cumulative foreign capital outflows of $111 billion, outnumbering the $93 billion logged during the global financial crisis. But China has seen an improvement in capital inflows, Goldman Sachs said in a research note sent to the Global Times.
In June, the Asian market excluding China recorded $21 billion in capital outflow, while the A-share market tallied $11 billion in capital inflows through the northbound leg of the stock linkups between the Chinese mainland and Hong Kong bourses.
Market concerns over a US economic recession or a big market correction have had an enormous impact on capital flows, especially in North Asia, while A shares and the equity market in ASEAN members are shown to be more prudent, the US investment bank wrote, recommending increased stakes in China's A shares.
"If investors are looking at challenges in all the markets, China really stands out as something that offers a resilient or safe haven from many of those risks," Mixo Das, Asia equity strategist at JPMorgan, told a television interview on Bloomberg in late June.
More famed names on Wall Street have joined the ranks in ramping up bets on Chinese assets, the Securities Times reported on Friday, citing Citi, UBS, Bank of America Securities and DBS.
Citi upgraded Chinese shares as outperforming, while Bank of America Securities suggested that short-term corrections in Chinese shares can be seen as a buying opportunity. UBS, for its part, estimated that Chinese shares would continue to outperform the global equity market over the next few months.
The stability of the yuan since late May that has seen the Chinese currency only weakening slightly against the US dollar, while the euro, sterling and yen were struggling with a dive versus the dollar, also speaks volumes about the international community's optimism over Chinese assets.
Alongside the conspicuous upturn in market sentiment was a raft of pro-growth measures ranging from ramped-up infrastructure investment to a robust push for car purchases that have propped up the economy in recent months, analysts said, betting on the turnaround versus a downtrend in other major markets to underpin a continued outperformance in Chinese assets.
Chinese shares have stood out as a silver lining in an otherwise poorly performing market at large, and the country will remain alluring for global investors even though the US Federal Reserve's continued reduction of its balance sheet has tended to roil the global market, Raymond Deng, investment strategist CIO of consumer investment and insurance products at DBS Bank, told the Global Times on Friday.
A shares still boast reasonably low price-to-earnings ratios, making the case for a continued upturn. This, adding to decent dividends paid especially by major listed banks, renders A shares a much better buyable option when compared with US stocks, Deng said.
He cited US business earnings that are under pressure from a downtrend in the US economy as an incentive for increased interest in Chinese assets.
This year could be a turning point for global investors seeking safe haven assets amid varied uncertainties, Deng commented, considering Chinese shares to be among the top preferred choices.
That suggests buying opportunities in Chinese financials and infrastructure shares, the strategist continued.
The Chinese market has largely remained stable despite the fallout of domestic Omicron flare-ups and trading activity in the market has stayed robust, Dong Shaopeng, an expert advisor for the China Securities Regulatory Commission, told the Global Times on Friday, describing the country as "the best destination for investment."
With the country's epidemic prevention and control trends stabilizing, investment, trade and factory activities are in an evident recovery mode, Dong said, stressing that new-energy vehicles, in particular, have turned out to be a draw for investors.
Construction site of the Yangtze River crossing pathway project for the new 500-kilovolt transmission line in East China's Jiangsu Province on June 1, 2022. Running from Fengcheng to Meili, the line will further support the integration of energy and electricity in the Yangtze River Delta. Photo: cnsphoto
Furthermore, solar power, energy storage and transmission among renewables are top on the list for those exploring opportunities in the Chinese market, he went on to say.
Such conspicuous preferences for listed firms in the broad renewable sector are envisioned as boosting these businesses' financial profiles and consequently cementing China's leadership in the global marketplace for clean energy.
A host of new energy carmaker and clean energy firms have staged an impressive rally in the A-share market since late April, with some of them seeing shares more than double over the period.
Politically Correct
antiterror13
Brigadier
Imagine if China had banned the solar cells to the USA or EU as the solar cells are used to oppress people and support military
antiterror13
Brigadier
Thanks, perhaps going forward put the definition from the start in the post, not everyone as "knowledgeable" as you are
, especially uncommon onesDon't assume when you know some abbreviation out of the blue that everyone would know that as well
A slight erratum: an Mtoe is 42 Petajoules, not Gigajoules as I stated. Fortunately, this mistake does not affect my conclusion, as I used the correct numeric value of 42e15 J.
The solar energy on Earth, that's not reflected back to space, is really eighteen thousand times more than all the energy the world is currently using.
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For any acronym that you don't know.Thanks, perhaps going forward put the definition from the start in the post, not everyone as "knowledgeable" as you are
Don't assume when you know some abbreviation out of the blue that everyone would know that as well
e.g. PC
Google " pc meaning "
Choose the definition to be the most likely fit.
.
In the context where it was discussed earlier in thread, the word Zeitgeist comes closer I feel to what the poster was referring too. Very good reasons were given.
Am I missing something? That seems oddly aggressive when I'm not the one you originally quoted.Thanks, perhaps going forward put the definition from the start in the post, not everyone as "knowledgeable" as you are
Don't assume when you know some abbreviation out of the blue that everyone would know that as well
There's no need to be passive aggressive with your response since it's clear as daylight that he gave you an honest to goodness definition. No need for inference of malice or ill intent that frankly wasn't there to begin with. Besides, what else could P.C. possibly means in the context of "political discussion" other than Politically Correct.Thanks, perhaps going forward put the definition from the start in the post, not everyone as "knowledgeable" as you are
Don't assume when you know some abbreviation out of the blue that everyone would know that as well
If however, my own take on your response is also a misunderstanding, let me take this opportunity to apologize in advance, if not, then let's not be a prick to one another for no good reason.