China’s market outlook has improved slightly, according to Liechtenstein-based LGT, but investors are still advised to wait for geopolitics to calm down first due to the current election cycle in the US.
While recent data show that new house prices in China are still falling, the property rescue package announced in May bodes well for the market. According to a report authored by Stefan Hofer, chief investment strategist at LGT Private Banking Asia, the outlook for Chinese assets has «improved marginally» with the measures potentially helping to stabilize the market and boost consumer confidence.
Nonetheless, Hofer suggested investors «wait for calmer geopolitical waters ahead» before increasing market exposure due to the current election cycle in the US and the «likely» introduction of further tariff and non-tariff measures.
Japan Preferred in Asia
Within Asia, the bank’s most preferred equity market is Japan, despite the weakening of the yen against the dollar. Outside of the region, North America is also one of its preferred markets.
In LGT’s balanced investment strategy, it is overweight on equities with a 42 allocation and neutral on fixed income (42 percent allocation) with a heavy tilt towards investment grade bonds. It also suggests a 14 percent allocation towards alternatives.
