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 adjustment mode.according to JPMorgan Chase & Co.
“If investors are looking for challenges across markets, China really stands out as something that offers resilience or a safe haven against a lot of those risks,” Mixo Das, Asia equity strategist at JPMorgan, said in a television interview on Bloomberg. . “China is the least impossible market to buy right now.”
Optimism about growth-supporting policies, coupled with China’s moves to somehow live with the coronavirus even as it sticks to a Covid-Zero approach, has brought the benchmark CSI 300 index close to entering a bull market. . The index is up almost 19% from a low in April. It fell 1.5% on Wednesday after President Xi Jinping said again that the Covid-Zero policy is the most effective.
Das added that China’s easing of some measures puts its stock market “in a very good position,” especially when it offers extremely low relative valuations. China’s key gauge for stocks on the ground is trading at 13.1 times the 12-month forward earnings estimate, compared with 16 times for the S&P 500 index, according to data compiled by Bloomberg.
The Hong Kong-based JPMorgan strategist joins a growing list of market participants who have become more bullish on China’s prospects this month, helping the CSI 300 index outperform global peers by the most since 2014 this quarter.
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