China will no longer lift all boats, so investors must place bets carefully, look across Asia: JPMorgan Private Bank
- Holding cash is becoming less attractive, while select areas in China and bonds are becoming better investment opportunities, says Alex Wolf
- Bank likes ‘onshore listed companies that could benefit from government policy’, as well as high-dividend companies, telecoms and gaming
Holding cash is becoming less attractive, while select areas in China and bonds are becoming better investment opportunities, according to a JPMorgan executive.
Investors cannot ignore China, but they should be selective about their allocations going into the new year, according to Alex Wolf, managing director and head of investment strategy for Asia at JPMorgan Private Bank.
“The big question is whether China can reflate the economy and escape the deflationary loop,” Wolf said. “Risks are equally skewed to the upside and downside. Nonetheless, China is not going to be the tide that lifts all boats as it used to.”
JPMorgan, which manages US$2.5 trillion in assets, said clients are holding significantly more cash than they did two years ago: at least US$120 billion more in short-term money-market funds and treasury bills.
It follows a global trend of investors stockpiling cash. Investors had US$5.6 trillion in money-market instruments in 2023 in the US, according to Morningstar.