Overview: Asian equities and especially Chinese equities continue to be weak due to depressed sentiment.
Asian equities and especially Chinese equities continue to be weak due to depressed sentiment. Not withstanding valuations are very attractive and Chinese equities are currently trading at more than 1.5 standard deviations below its long-term average. Exacerbating this problem has been relatively little stimulus being injected into the Chinese economy given the national people’s congress will be having their next major meeting in November. There is very strong evidence to suggest President Xi will be re-elected for a third term and stimulatory measures and policies to follow from there onwards.
The investment committee is reviewing its tactical asset allocation and is considering decreasing broader Asian exposures in favour of Chinese equities in the coming months.
The committee made no changes to the portfolio this month.
