There is a window of opportunity to capitalize on a China rebound, according to EFG’s Mozamil Afzal, with attractive valuations, geopolitical calm and other factors.
After a short-lived post-reopening rally, Chinese equities have disappointed, especially following economic data releases that indicated growth that was slower than expected.
According to EFG’s Mozamil Afzal in a conversation with finews.asia, there is scope for a market rebound in the second half of 2023 due in part to attractive valuations.
«[T]here is a bit of a window for the Chinese stock market to recover,» said Afzal, who is EFG Asset Management’s global CIO, asset allocation committee chairman and CEO. «The market is cheap, so you are being paid to own the stocks now.»
Geopolitics, Manufacturing
Afzal also highlighted other tailwinds for China such as expectations of a manufacturing recovery in 2024 and easing geopolitical tensions due to a desire for stability during the US presidential elections in early 2024.
«We probably have six months of calm in international relations between the US and China. That noise volume is going to start again by March or April,» he said.
Elsewhere in the Asia Pacific region, EFGAM is also bullish on India for its growth story and Japan due to a strong earnings outlook. Overall, the asset manager is overweight in equities as well as high quality government bonds and investment grade bonds.
