Although investor sentiment in Chinese equities remains poor, VP Bank believes this makes it an interesting opportunity and has decided to turn overweight on the market.
VP Bank has decided to move Chinese equities to an overweight position in its portfolio, according to a note. This is despite broader investment sentiments remaining poor on the market.
«The record highs for Bitcoin, gold and Japanese equities have triggered some buzz. Conversely, the sentiment in China is rather bleak at the moment. From an investment perspective, this makes Chinese equities interesting,» said VP Bank CIO Dr. Felix Brill.
Small Surprises
According to Brill, there are indeed ongoing headwinds for China including scars from the property crisis, economic struggles and weak market performance. Nonetheless, it is such a situation where minor tailwinds could act as a catalyst.
«Many investors are therefore avoiding the Chinese stock market. There is a great deal of pessimism, in stark contrast to the positive mood on the world stock markets. This can also be seen as an opportunity,» Brill explained, highlighting favorable valuations. «In such an environment, small positive surprises are often enough to trigger a change in sentiment that promises at least temporary price gains.»
