Principal Asset Management, a US-based asset management firm, said China has taken “meaningful” steps towards economic recovery, leading to an improvement in investor sentiment. Some say the government should encourage a “healthy, gradual bull market” rather than wild price fluctuations.
“We’ve been increasing our investment in China, indirectly through Hong Kong and directly through China,” global equities portfolio manager Steve Larson said Thursday at a conference in Hong Kong. “I went from being skeptical to being more optimistic about what’s going to happen.”
Despite its underweight allocation to China, Larson said the fund is “moving in the right direction.” Mr. Larson’s firm, part of Des Moines, Iowa-based Principal Financial Group, manages approximately $699 billion worldwide.
This optimism comes on the heels of last month’s policy stimulus from the Chinese government to stem corruption in real estate and stock markets, and renewed confidence among global funds about China’s near-term prospects. It reflects. The package, announced on September 24, triggered a global stock market rally along with wild swings in stock prices.
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Stock market volatility in Hong Kong and mainland China
Stock market volatility in Hong Kong and mainland China
It’s not just principal asset management. Wealth managers in Asia-Pacific are also becoming more bullish as expectations for stronger policy easing rise, according to a Bank of America survey this month. They increased their investment in Chinese assets and reduced their allocation to India.
Alan Wang, managing director and chief investment officer for Greater China Equities, said: “As an investor, I’m naturally skeptical of Chinese government policy because enforcement has been a big issue in the past. ” he said. He added, “But in this round, we believe a few things make a lot of sense” in terms of new monetary and fiscal incentives.
