Nobert Barigye Kiiza’s Post

#chartoftheweek: China's stimulus measures, including a reduction in reserve requirements for banks and approximately $114 billion in liquidity support for stocks, provided a significant boost to markets. The CSI 300 surged 15.96% this week, breaking above its long-term moving average for the first time since 2022. The MSCI China A index also saw a strong performance, increasing by 20.33%. Additionally, the MSCI Emerging Markets index rose by 6.6%, benefiting from the favorable impact of China's financial support. These measures helped stabilize and uplift the broader Chinese and emerging markets, reinforcing investor confidence and driving significant gains across the board

The MSCI China index has lost nearly two-thirds of its value from its 2021 highs to its 2022-2024 lows. As investor confidence wanes, it is essential to assess the underlying drivers. From a broader perspective, we believe China’s policies align with its ambition to become a technological powerhouse by 2035. While it is unclear if this will directly boost stock market performance, we prefer to focus on individual companies, as outcomes depend on individual factors like governance and competitive positioning. Yet, with low valuations and fresh monetary and fiscal stimulus in play, Andrew Deback, CFA sees attractive long-term opportunities: https://lnkd.in/ePUTxdhc #China #Equities #Deflation --Marketing communication-- Investing incurs risks. Past performances do not guarantee future results. 

China’s Stimulus Impact: The CSI 300 Index surged over 30% after China’s stimulus package was announced but has since retraced, maintaining a 14% YTD gain. Concerns about growth and U.S. tariff threats limit optimism. Investor Dilemma: Lombard Odier’s Asia CIO, John Woods, warns of potential losses for late investors, describing it as a “painful trade.” Strategic Shift: Lombard Odier removed standalone China allocations in 2023 and maintains limited exposure via emerging markets. Consumption Focus: Woods emphasizes the need for meaningful consumption-driven stimulus for sustainable growth. Mixed Views: While some like Man Group and abrdn Plc remain bullish, others are cautious amid economic uncertainties. #ChinaStimulus #CSI300 #GlobalMarkets #EmergingMarkets

🌏 It’s an extraordinary time for Asian economies with risks from the upcoming US election in particular driving a fork in the road on the outlook for the region into year-end. Our Global Head of Emerging Markets and Asia Pacific Research, Sameer Goel and his team take a closer look at the binary nature of these risks in their latest quarterly Asia Corporate Newsletter. On the one hand, the Fed is in a good position to manage an almost perfect landing, which should give Asia room to ‘normalise’ its policy settings. And with China’s economic stimulus potentially the largest ever in nominal terms, the team feels comfortable that the left tail risk for the economy should be better contained in the near term. To the extent that the latest round of stimulus in China also actively targets a recovery in consumption, the rest of Asia should also benefit. 📶 On the other hand, the outcome of the US election could bear heavily on the relationship between US and China, and by extension, other parts of Asia, with the use of tariffs potentially being a key differentiating factor between alternative scenarios. The newsletter talks about potential hedging strategies in the current environment for corporates with underlying Asia FX exposure. It also suggests that this may be an opportune time for Asian corporates to issue USD-denominated bonds. ➡️ Deutsche Bank clients can read the full report here: http://deu.ba/6044fuN3E #dbresearch #DeutscheBank #AsiaPacific

We are cautious on chasing the post-stimulus China equity market bounce. Taking a step back, although Chinese EPS growth has troughed as we expected, recent data points suggest that the recovery is likely to be slow as the headwinds from sluggish consumer spending, rising tariff risk, and deflationary forces will likely more than offset stimulus tailwinds. Indeed, consensus expectations for China's 2025 EPS growth have started to fall and the market's EPS revisions ratio has turned sharply lower following the recent reporting season, in contrast to resilience elsewhere in EMs. Clients can read our full China equities outlook note here --> https://lnkd.in/e7RHuxqY

Since it was opened up and reformed in the late 1970s, China’s economy has grown at an average rate of 9% a year. Not this year. Facing strong disinflationary pressures, a severe property downturn and frail consumer confidence, China risks missing its own annual growth target of around 5%. So, as the week began, markets reacted enthusiastically to the People’s Bank of China unveiling a major package of aggressive measures designed to stimulate the economy. https://lnkd.in/eaM2Mx8g

After a 3 year bear market and a real estate crisis, MSCI China was down 60% since 2021 while Global Equity Indices have little exposure to the region.   However, the current valuation level offers attractive risk/reward opportunities.   To know more about our conviction, discover our 6T China Common Prosperity Strategy (perf. since 2022 vs MSCI China : 22.3% / perf. YTD : + 6.5%), which provides a better China equity allocation by investing mainly in A Shares and domestic stocks.

Since it was opened up and reformed in the late 1970s, China’s economy has grown at an average rate of 9% a year. Not this year. Facing strong disinflationary pressures, a severe property downturn and frail consumer confidence, China risks missing its own annual growth target of around 5%. So, as the week began, markets reacted enthusiastically to the People’s Bank of China unveiling a major package of aggressive measures designed to stimulate the economy. #weekwatch #investing #financialplanning