Exclusive | Credit Suisse cautiously optimistic as mainland investors back China reopening, foreign funds unsure

Overall message is one of cautious optimism even if China’s reopening was too chaotic, Swiss bank’s Asia-Pacific chief investment officer says

Hong Kong will remain a gateway to China’s markets, will have a ‘very profound and robust future’

Reading Time:3 minutes

Travellers at a railway station in Shanghai. Foreign investors are yet to buy into China’s reopening story because of concerns about the impact of rapidly growing infection numbers on companies’ growth and earnings. Photo: Reuters

Published: 11:20am, 19 Jan 2023

Mainland Chinese investors are backing Beijing’s reopening playbook, even if foreign investors appear to be unsure, according to Credit Suisse.

The Zurich-headquartered lender is overweight on Chinese equities and believes this year’s performance for investors should be better “relative to last year” and that there are still plenty of pockets of opportunity.

“The overall message this year is one of cautious optimism,” said John Woods, Asia-Pacific chief investment officer at the Swiss bank.

China is a staple market for the bank’s Asia-Pacific clients, with pharmaceuticals, tourism and the internet sector among their top picks. High-yield bonds and investment-grade credit are among the bank’s top investment themes for the first half of 2023, Credit Suisse said.

John Woods, Credit Suisse’s Asia-Pacific chief investment officer. Photo: Jonathan Wong

As of September, the bank had 249 billion francs (US$268.7 billion) in assets under management in Asia-Pacific, representing 17 per cent of its global portfolio of 1.4 trillion francs. Its Asia portfolio has increased marginally from 221.3 billion francs at the end of 2020.

.css-sioo19{color:#c79a00;}Exclusive | Credit Suisse cautiously optimistic as mainland investors back China reopening, foreign funds unsure

Exclusive | Credit Suisse cautiously optimistic as mainland investors back China reopening, foreign funds unsure