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%.
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.
