Chinese stocks have slumped in recent weeks on Beijing’s close ties to Russia, regulatory headwinds and a zero-tolerance Covid-19 policy, before rebounding in the past few days on the nation’s strong push to stabilize financial markets. On Monday, the valuation of the tech-heavy Nasdaq Golden Dragon Index dropped to 13.6 times forward earnings, a far cry from about 41 times in June 2021, just when Beijing had started lashing Internet companies.
Credit Suisse Group AG’s global investment committee upgraded its stocks allocation to overweight just three months after cutting it, and said it sees Chinese equities offering “attractive upside potential” after a record rout.
The committee raised US stocks to overweight, citing resilience in the face of risks surrounding Russia’s invasion of Ukraine. Credit Suisse also increased exposure to Chinese equities, citing low valuations and supportive economic and regulatory policies.
