US election keeps investors on Chinese stocks

Some Chinese stocks are trading at attractive prices, but investors are holding back on buying due to the uncertainty surrounding the upcoming US presidential election.

Illustration photo. (Source: Zuma Press)

Asset managers of public and private funds say some Chinese stocks are trading at attractive prices, but they are holding off on buying due to the uncertainties surrounding the upcoming US presidential election.

Christopher Ailman, former chief investment officer of the California State Teachers' Retirement System, said China was the focus of a regular discussion he moderated last week to help raise awareness of current investment issues.

While the discussion was expected to be about the risks investors face if tensions between Israel and Iran escalate, Mr. Ailman said the conversation quickly shifted when investors realized that Iran’s oil exports are largely absorbed by China.

Money managers agree that some Chinese stocks are looking attractive from a technical perspective, but none are saying they are adding to their exposure to Chinese stocks, especially ahead of the US presidential election, Mr. Ailman said.

As trade tensions between China and the US escalate and China’s economy slows, many asset managers have reduced or eliminated their exposure to China altogether, Mr. Ailman said, adding that US and Canadian funds are particularly “afraid” to invest in China at the moment.

But because China investments typically don’t make up more than 5% of North American funds’ portfolios, Mr. Ailman said asset managers’ analysis of Chinese stocks is not as important as their views on real estate or the valuations of U.S. tech stocks.

China's stock market has been on a tear, rising more than 20% since the government announced a series of economic support policies in late September, fueling expectations that the Chinese government is preparing a major rescue plan to revive the ailing economy.

Market euphoria over an economic revival effort has faded, although some analysts hope the stock market rally will give way to a steadier and more sustainable recovery in the world's second-largest economy./.

Source: https://www.vietnamplus.vn/bau-cu-my-ghim-chan-nha-dau-tu-vao-chung-khoan-trung-quoc-post983646.vnp