Deutsche Bank’s Stefanie Holtze-Jen noted that the German lender was positive on the China market early on in 2022 when others were calling the market uninvestable at the time.
While Chinese equities were being described by some as ‘uninvestable’ in mid-2022, Deutsche Bank was mildly positive, as early as April, and maintained its stance throughout the year.
«You have seen us in the press very early on last year already talking about being cautiously optimistic on the Chinese equity market,» said Deutsche Bank International Private Bank's APAC chief investment officer Stefanie Holtze-Jen, in a recent briefing attended by finews.asia.
«People were almost amused that we stuck to the call when others were calling China uninvestable. Now, everyone’s turning the corner.»
EM: Asia Most Preferred
Within emerging markets, the bank sees Asia as the most attractive geographically with a diverse economic makeup coupled with tailwinds from China’s reopening. Markets like South Korea, Taiwan and China could also see a boost when the macroeconomic environment and investor sentiment improve, following an average valuation drop of around 20 percent.
In India, Deutsche Bank notes that despite recent volatility, it has performed well and that «it is difficult to see the […] stock market as fundamentally overpriced» due to continued strong economic momentum.
Overall in equities, the bank advises investors to take a barbell approach, focusing not only on value stocks but also selective growth stocks like large tech companies.
Fixed Income, Alts
Within fixed income, the bank has a preference for liquid, investment-grade bonds from the US and Europe, highlighting active management as a key factor for the asset class this year.
It also advises investors to further diversify with alternatives and remains positive on real assets like property as an effective hedge against inflation.
«Central banks and investors are likely to find 2023 rather easier. Despite our expectations of more stable financial markets in 2023, the world remains intrinsically risky. Prior thinking about potential financial implications can help protect portfolios,» said global CIO Christian Nolting in a separate note.
