scorecardresearchJPMorgan Sees China as Equity ‘Safe Haven’ Due to Policy Easing

JPMorgan Sees China as Equity ‘Safe Haven’ Due to Policy Easing

Updated: 29 Jun 2022, 02:18 PM IST
TL;DR.

China offers a “safe haven” in global equities as the nation is easing policies to boost growth at a time when most of the world is in tightening mode, according to JPMorgan Chase & Co.

FILE PHOTO: A man walks by the Shanghai Stock Exchange building in the Pudong financial district in Shanghai, China, February 3, 2020. REUTERS/Aly Song/File Photo

FILE PHOTO: A man walks by the Shanghai Stock Exchange building in the Pudong financial district in Shanghai, China, February 3, 2020. REUTERS/Aly Song/File Photo

(Bloomberg) -- China offers a “safe haven” in global equities as the nation is easing policies to boost growth at a time when most of the world is in tightening mode, according to JPMorgan Chase & Co.  

“If investors are looking at challenges in all the markets, China really stands out as something that offers a resilience or safe haven from many of those risks,” Mixo Das, Asia equity strategist at JPMorgan, said in a television interview on Bloomberg. “China is the least unbuyable market at this point.”

Optimism over growth-supportive policies, coupled with China’s moves to somewhat live with the coronavirus even as it sticks to a Covid-Zero approach, has brought the CSI 300 benchmark close to entering a bull market. The index has risen nearly 19% from a low in April. It dropped 1.5% on Wednesday after President Xi Jinping said again that the Covid-Zero policy is the most effective.

Das added China’s easing of some measures puts its stock market “in a very good stead,” especially when offers extremely cheap relative valuations. China’s key gauge for onshore stocks is trading at 13.1 times the 12-month forward-earnings estimate, compared to 16 times for the S&P 500 Index, according to data compiled by Bloomberg.  

JPMorgan’s Hong Kong-based strategist joins a growing list of market participants that have turned more optimistic on China’s outlook this month, helping the CSI 300 Index outperform global peers by the most since 2014 this quarter.

First Published: 29 Jun 2022, 02:18 PM IST