Billionaire investor Ray Dalio told CNBC “Street Signs Asia” Wednesday that everyone is underpondered in China,” but believes that making an investment in the country with the “right kind of balance” can be positive.
“Almost everyone is underpondered in China if you take a look at any of the benchmarks in relation to global capitalization,” said Dalio, co-founder of the Bridgewater Associates hedge fund.
“The first step is to gain exposure to China in a diversified portfolio. This means achieving the right kind of asset balance in China,” he said. “Our technique is, we call it the technique for all climates, it is a sure balance in which to achieve balance without reducing the expected performance. From there, it is necessary to perform tactical movements. “
“You will see a greater internalization of the [yuan], and that is an herbal consequence, because since the main reserve currencies have the demanding situations that we are talking about, there will be a detail of emptiness,” he told me.
The U. S. dollar index, which tracks the dollar’s strength against a basket of currencies, has lost about 7% in the past six months. At the same time, China’s central bank has allowed the yuan to pass about 4% against the US Dollar The current exchange rate is around $1 consistent with 6. 8 yuan.
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Dalio claimed that tactical investments would evolve over time.
China’s top rates have risen in recent months, backed by the resumption of the COVID-19 pandemic and the low incidence of viruses. China’s Shanghai Composite has risen 6% since the beginning of the year.
Dalio sees investment opportunities outside China in the region, but believes that many countries like India are falling behind.
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“There’s a lot less liquidity in those markets, (they) are much less developed,” he said.
“If there were a much greater progression of capital markets, more liquidity, more openness of those markets, the entrepreneurial spirit would be revitalized,” Dalio said. “Raising cash in this way and moving cash more successfully would revitalize the Indian economy. “
With nearly 7 million infections, India is the hardest-hit country at the time, the United States, which has suffered more than 104,000 COVID-19 deaths.
India’s GDP fell by 23. 9% in the April-June 2020 period.