Advertisement
JPMorgan upgrades China tech stocks two months after ‘uninvestable’ call sent market into freefall
- Chinese technology stocks soared on Tuesday after the US investment bank said regulatory clarity had started to emerge
- In March, JPMorgan called the sector ‘uninvestable’, sparking a sell-off before reports that the word had been published in error
Reading Time:2 minutes
Why you can trust SCMP
6
JPMorgan upgraded a slew of Chinese internet stocks including Alibaba Group Holding and Tencent Holdings, turning bullish two months after it shocked the market by branding the sector “uninvestable”.
Chinese technology stocks soared on Tuesday after the US investment bank said regulatory clarity had started to emerge, providing some much-needed certainty and reducing risk.
The new-found optimism represents a big change of heart. In March, JPMorgan said geopolitical and macro risks had made the sector “uninvestable” in the next six to 12 months.
Advertisement
The scathing description sparked one of the wildest swings in recent local market history before reports emerged that the word had in fact been published in error.
“Significant uncertainties facing the [internet] sector should begin to abate on the back of recent regulatory announcements,” said analysts including Alex Yao in a report on Monday. “We had originally forecast that these various uncertainties would continue for six to 12 months, with the earliest relief possible in [the second half of the year].”
07:30
Why China is tightening control over cybersecurity
Why China is tightening control over cybersecurity
Yao’s team raised the year-end price targets of 18 Chinese tech companies, including Alibaba, Tencent and Meituan. Chinese internet stocks have emerged from an “unattractive” phase after a spate of endorsements from Beijing.
Advertisement
Advertisement
Select Voice
Choose your listening speed
Get through articles 2x faster
1.25x
250 WPM
Slow
Average
Fast
1.25x