The Chinese life insurer's investment chief is positive about the long-term stock performance of Chinese state-owned enterprises under a 'valuation system with Chinese characteristics'.
A strong rebound in performance in November - likely to continue in December - could save the retirement scheme from experiencing the worst-performing year on record.
Chinese equities are gaining favour from a global allocation perspective in the renewable, electric vehicle supply chain, and industrial automation space. Meanwhile, doubts over the consumer sector remain under the country’s Covid Zero policy.
The absence of ETFs that track overseas equities and non-equity assets, such as fixed income and commodities, may limit the attraction to both onshore and offshore institutional investors.
Market volatility is likely to remain high as investors try to figure out the duration and severity of lockdowns. Stocks with attractive valuations may start to outperform in the second half of 2022.
Pension funds and life insurers are still cautious about US-listed Chinese firms and some of them are switching to onshore A-shares.
Fund managers are keeping an eye on how the Chinese government will rule on easing monetary policy, ending Covid lockdowns, and its relationship with Russia, while at the same time “bottom-fishing” for good deals in the world’s second-largest economy.