China is currently the «biggest value story» in Asia, according to Citi investment strategist Ken Peng, with potential tailwinds from household savings.
Citi has a broadly positive view on Asian equities, highlighting relatively attractive valuations in China, India and Southeast Asia. Japan is also seen as a safe bet for accessing Asian development amid geopolitical tensions.
«China is clearly the biggest value story, whereas the other ones are probably more growth-oriented,» said Ken Peng, head of investment strategy, APAC at Citi Global Wealth (CGW).
Spending Power
While there are market concerns about the intensity of government stimulus, Peng underlines that China’s spending power could also play a major role, especially after the recent savings surge. According to public data, household savings soared by 9.9 trillion yuan ($1.4 trillion) in the first quarter of 2023, compared to a 17.9 trillion increase in all of 2022.
«But there's no confidence to spend it. That's a lot of fuel once sentiment normalizes,» Peng said. «This is the best time to be [investing in] core, balanced portfolios. China has a space in that.»
«For global portfolios to have no China, we think it is a mistake,» added Steven Wieting, CGW chief economist and chief investment strategist.
