- BlackRock on Monday cut its rating for Chinese stocks from “overweight” to “neutral”.
- The asset manager’s strategists cited growth, stimulus and geopolitical concerns.
- The decline comes as Beijing struggles to revive China’s economy and troubled property sector.
BlackRock Investment Institute has lowered its outlook for Chinese stocks, with weak data fueling pessimism on Wall Street.
Strategists led by Jean Boivin said in a research note on Monday that they cut their ratings for China-listed equities to “neutral” from “overweight”. He cited slow growth, limited stimulus and tensions between Beijing and much of the West.
“We are neutral. Growth has slowed. Policy stimulus is not as big as before,” the BII team wrote. “Structural challenges impair long-term growth. Geopolitical risks persist.”
He said China’s troubled property sector also “remains a stumbling block” for the world’s second-largest economy.
BlackRock’s rating cut comes amid signs that traders are beginning to view China as uninvestable, with the benchmark CSI 300 index falling 32% since the start of 2021.
According to Bloomberg calculations, foreign investors pulled out $188 billion from the country’s equity and debt markets in the 18 months to June 2023, showing a decline of 17%.
Beijing called time on its strict zero-COVID lockdown late last year, but has since lowered its year-end gross domestic product target as it faces deflation, rising youth unemployment and It is struggling after the yuan sank to a 16-year low earlier this month.
Policymakers have introduced some stimulus measures to boost activity, but have stopped short of implementing the so-called “bazooka” or “big bang” package that many economists believe would be the best way to revive growth. Will be necessary for.
Source: markets.businessinsider.com
