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China’s markets still have genuine potential despite soured sentiments

Khairani Afifi Noordin
Khairani Afifi Noordin • 7 min read
China’s markets still have genuine potential despite soured sentiments
To spur the slowing housing market, Chinese authorities have started to announce several easing measures. Photo: Bloomberg
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In the past year, investors avoided Chinese stocks due to their unattractiveness compared to global peers. Hopes for a post-pandemic recovery boosting market sentiment have been dampened by recent macro data showing a bumpier recovery and looming risks of policy uncertainties and economic headwinds.

The tones coming out of businesses and consumers were extremely conservative this year, says Nicholas Chui, senior vice-president and portfolio manager at Franklin Templeton for emerging markets equity. He adds that this has led to slowing earnings growth, dragging the performance of Chinese equities.

The MSCI China All Shares, for instance, is down 9.56% over the past year as at Aug 31. In comparison, within the same period, the Nikkei 225 is up 16.12%, the S&P 500 is up 15.94%, and the MSCI Emerging Markets is up over 1.69%.

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