China bulls getting tired of waiting, stock recovery remains elusive
Wall Street's staunchest supporters, with hopes for a turnaround fading in the world's No. 2 economy.
Over the past two weeks, long-standing China bulls UBS Global Wealth Management, Nomura Holdings Inc., and JPMorgan Chase & Co. have all downgraded the country's equities, citing concerns ranging from the property-led demand slump to piecemeal stimulus measures and geopolitical tensions ahead of the US elections.
The thinning patience with an increasingly elusive Chinese stock rebound has coincided with growing consensus among the world's biggest banks that the country will fail to meet its growth target of around 5% this year. The market weakness could also quicken a shift away from the China-centric model toward new favorites like India, Taiwan and Southeast Asia.
Exclusion of the country's stocks from global investment portfolios is also fuelling a retreat.
New emerging-market equity funds launched this year that don't include the nation have already matched 2023's full-year record of 19. India has emerged as a favourite due to its vibrant economy, with Morgan Stanley citing that the nation's weighting surpassing that of China's in the MSCI Emerging Markets Investable Market Index should spur further foreign inflows. Down 5.8% this year, the benchmark CSI 300 Index ranks among the world's worst-performing major gauges and is heading for a record fourth year of losses.
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