Investing 29-11-2022 12:05 17 Views

Protests erupt across China: are Chinese stocks still investable?

Chinese stocks are in focus on Monday as protests against the zero COVID policy simmer across the authoritarian state.

Should you stay away from Chinese equities?

On the flip side, Beijing is reporting record number of infections every day that’s adding to uncertainty and making investors more nervous. Making it even worse is the ongoing property slump.

None of it, however, makes the region’s equity market uninvestable, said Edmund Harriss – the Chief Investment Officer of Guinness Global Investors on CNBC’s “Squawk Box Europe”.

We expect a reopening in the next couple of quarters. By mid-2023, we expect a very different situation on the zero COVID. On the property side, the expected collapse hasn’t happened. Lines of credit have been extended that buys time.

China is wrestling with an unusually inflated fiscal deficit at the moment but Harriss says it makes sense for an economy that’s coming out of the pandemic.

Is it worth investing in Chinese tech stocks?

Daniel Lacalle of Tressis Gestion has somewhat of a similar opinion as well. In a separate CNBC interview this morning, he suggested that the sell-off in Chinese stocks is an opportunity for the long-term investors, especially those that are interested in the tech space.

Investors should actively look for opportunities in sectors that will certainly continue to be very strong. I think tech is one of them. It’ll likely show a much better performance in 2023 because we have behind lacklustre profits.

Lacalle, however, recommended being selective and investing in individual quality tech stocks and not relying on the index for optimum returns.

“CQQQ” – the Invesco China Technology ETF is currently down about 40% for the year.

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