We classify the overall environment investors face through equity into 4 key issues that have an effect on markets during and after the pandemic. China emerges with its delight from the “first inning, the first to leave,” to be played at the time of the year, and remains despite geopolitical challenges.
Probably the worst of the pandemic is us. One of the signals we are using to track the effects of the pandemic is high frequency awareness coming from other channels. Knowledge shows that Asia, specifically China, is ahead of the recovery curve, or as we say, a “first in, first out” case. Figure 1 shows the sequential recovery recorded in various sectors in China.
Countries that learned about and recovered early from the pandemic, such as China, Taiwan and Korea, have similar percentages of experiences. They have a tendency to i) manage an active virus tracking system, ii) adopt a rigorous testing approach, and iii) conduct normal community surveillance to prevent the chain of infection from spreading. However, we are not satisfied with the flattened curve and our constant vigilance on the progress of the recovery.
Policy relaxation is widespread in virtually each and every country in the world. The US Federal Reserve took rates to a record low twice in the first part of 2020, ahead of its normal committee meeting. Amid the unprecedented lockdown, the Fed also promised an unlimited amount and the acquisition of recent fallen angels.
Such a gigantic bailout can help anchor the economy and injecting cash into the formula also implies inflation in capital markets and asset prices. Instead, China has focused on easing credit facilities to help companies triumph over such a public fitness crisis. on the degrees of the world economic crisis.
One of the main threat points facing equity investors, namely the China-related markets, is the resurgence of tensions between China and the US From a practical point of view, we believe that neither China nor the States Together they can break their relationship in the long run. .
In our opinion, the decoupling of China and the United States – possibly a pair of complementary powers – would complicate the answers to the world’s problems; in fact, the need makes it a logical scenario in which the United States and China will have to become partners. The headlines are laden with rhetoric that China-US appointments are failing, we have an irritating opinion.
We believe that the long-term direction of their appointments would evolve towards cooperation out of shared need. On that basis, we would consider that after the U. S. presidential election in November, relations would stabilize. Indeed, it is imaginable that in achieving some other facet of history, where tensions between China and the United States will remain tense. In this case, China continues to offer great investment opportunities with its reforms and national development.
But if we are right about the renewed or reestablished relationships, the Chinese equity markets will benefit from a really extensive review. The resumption of this dating greatly expands the scope of foreign interests in China.
The revisions expressed are those of Value Partners Hong Kong Limited only and are subject to replacement based on market and other conditions. The data provided does not constitute an investment recommendation and should not be considered as such. All curtains have been received from sources believed to be reliable at the time of submission, but their accuracy is not guaranteed. This curtain comprises certain statements that could possibly be considered forward-looking statements. Please note that these statements are not promises of long-term functionality and that actual effects or advancements may differ dramatically from those projected.
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This article has been reviewed through the Hong Kong Securities and Futures Commission Issuer: Value Partners Hong Kong Limited.
We have been practicing disciplined prices for 25 years making an investment in Asia. Founded in 1993 through Cheah Cheng Hye, known as “Warren Buffett of Asia”,
We have been practicing disciplined pricing for 25 years making an investment in Asia. Founded in 1993 through Cheah Cheng Hye, known as “Warren Buffett of Asia,” we now manage $ 15 billion (as of December 31, 2018) in a wide variety of stocks, constant income, alternatives, assets, and ETFs. We are known for the meticulous, in-depth studies and variety of bottom-up inventory conducted through a 70-person team of cashier investment professionals across Asia. Our functionality registry speaks for itself. (Not to mention, we’ve won over two hundred industry awards since our founding. ) As the largest asset manager in Hong Kong, we seek to serve as an investment solutions provider for investors in China and a specialized investment in China for investors around the world.