The recent correction in Chinese internet stocks has been seen as a buying opportunity by some investors due to attractive valuations and solid growth prospects.
Financial institutions like Edmond de Rothschild express disappointment in Beijing's stimulus measures, believing they will not address the structural issues in the economy.
Despite this, Edmond de Rothschild maintains a positive stance on Chinese equities while reducing investments in emerging markets and increasing exposure to U.S. equities.
UBS Global Wealth Management also reacts to China's fiscal support measures, including a 10 trillion renminbi local government debt resolution plan aimed at reducing hidden debt risks.
However, the lack of additional measures to stimulate consumption or address challenges in the real estate sector falls short of market expectations.
The Hang Seng index has declined due to the absence of immediate fiscal stimulus, raising concerns about the pace of economic recovery in China.
Investors are uncertain about China's attempts to revive economic growth, especially in the real estate sector, and the potential impact of U.S. tariff hikes.
Mark Haefele of UBS adjusts his investment strategy within Chinese equities, favoring defensive and high-yielding sectors such as financials, utilities, energy, and telecommunications.
He believes that investment-grade bonds in China remain sound, with minimal impact on state-owned enterprises and financial institutions.
Haefele maintains a neutral stance on Chinese equities but is open to a more positive outlook if the market experiences a significant downturn and stimulus measures align with or exceed expectations.
The evolving fiscal policy and international relations will continue to shape the investment climate in China, requiring investors to stay vigilant and adaptable.