Following a string of dramatic interventions by Beijing, the worst selloff in Chinese markets since 2008 turned into a historic surge.
Co. analysts warned China’s internet stocks were “uninvestable”. The world is in a different place now., the worst selloff in Chinese markets since 2008 turned into a historic surge, catapulting the country’s US-listed technology firms into a rebound not seen before.
China’s top financial policy committee swung into action. It vowed to ease a crackdown on technology firms, support the battered real-estate market and stimulate the economy. The pledge follows a prolonged squeeze on financing for property developers and a sweeping regulatory campaign aimed at internet giants such as Alibaba Group Holding and Tencent Holdings.
Goldman Sachs Group strategists recommend an overweight position on Chinese equities, citing the country’s well-anchored growth targets and low investor positioning. And in an ad hoc meeting this week, Credit Suisse’s investment committee increased its exposure to Chinese equities into an overweight.
“Look at Alibaba, you’ve got a value and price mismatch,” said Justin Tang, head of Asian Research at United First Partners in Singapore. “You are buying good value, but when will price reflect that value? That will take some time.”Sceptics remain unconvinced by the valuation argument. As risks abound globally, the policy predictability of developed markets outshines the attractive valuations found in economies such as China, they say.
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