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BlackRock loses confidence in Chinese stocks as property slump stokes losses

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BlackRock downgrades Chinese stocks as conviction sours amid property slump and stimulus policy limp

The world’s biggest money manager lost confidence in Chinese stocks and their emerging-market peers after turning bullish in FebruaryThe MSCI China Index has lost 11.8 per cent since late February; Chinese stocks alone account for 30 per cent weight in MSCI EM Index excluding Taiwan stocksChina stock marketJiaxing LiPublished: 5:40pm, 19 Sep, 2023Why you can trust SCMP

Seven months after taking a punt on Chinese stocks, BlackRock is turning bearish again as almost everything has fallen short of expectations for the world’s biggest money manager.

Strategists at BlackRock Investment institute downgraded its tactical view on Chinese equities and their emerging-market peers to neutral from overweight, saying “China’s property sector remains a drag even with growth showing signs of stabilising.”

“Growth has slowed. Policy stimulus is not as large as in the past,” strategists including Jean Boivin and Wei Li wrote in a report published on Monday. “Structural challenges imply deteriorating long-term growth” [while] geopolitical risks persist. “We see growth on a slower trajectory” in emerging markets, they added.

The institute provides BlackRock, which manages about US$9.4 trillion of assets, with research and insights on public and private markets, economies, politics and asset allocation.

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