Market volatility and uncertainty about China’s indebted real estate sector have led banks’ investment chiefs to be cautious about their assets, when there is broader nervousness about emerging markets as a whole.
“I would take a ‘wait and see’ approach in emerging markets,” Credit Suisse global chief investment officer Michael Strobaek said at Reuters’ Annual Investment Outlook Summit.
“I would take a day-to-day, week-to-week approach to China to see what is unfolding on the side of bad debt and politics,” he said, referring to the troubles in the country’s gigantic corporate debt sector. “Only if I see really interesting opportunities, would I go back in.” added.
Willem Sels, president of global investment, Private Banking and Wealth Management at HSBC, said clients needed to take a longer-term view of emerging markets, after many were hurt by recent volatility. “We have a neutral vision on China, we try to diversify,” he said.
“We try to gain the confidence to invest in China. We try to align ourselves with what is clear in terms of government policy, and that is the transition to net zero (of carbon emissions), ”he added.
Investors can still “find some winners” in China by delving into areas such as green technology and 5G-related businesses, where the government shows significant support, said Mark Haefele, president of investment at UBS Global Wealth Management.
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