Promising but risky – will 2023 be the year of Chinese equities?

Frankfurt After a long period of uncertainty, volatility and price falls, the Chinese stock market is beginning to turn around. Hong Kong’s Hang Seng index has risen more than 30 percent since its low for the year in late October.

Now, for the first time in two years, global investment strategists are recommending an overweight in Chinese equities. According to a recent survey by Bloomberg News, 60 percent of professional investors recommend buying stocks from China. 31 percent advise selling.

Their optimism for 2023 rests on various pillars: the relaxed Covid regulations, the easing of geopolitical tensions and favorable valuations. “We expect investors who are underweight China to start positioning themselves,” Xiaolin Chen, head of international at fund provider Kraneshares, told Handelsblatt. However, there are some risks that investors should be aware of.