Amundi Looking Beyond China Crackdown to Buy Strategic Stocks
(Bloomberg) -- Amundi SA is looking beyond the damage caused by the Chinese government’s regulatory overhaul of its economy to focus on stocks which are strategic to Beijing’s goals.
“This short-term pain could unveil its benefits over the long run and provide good entry points to long-term investors,” Vincent Mortier, deputy group chief investment officer at the asset manager, said by email. “We are focusing on strategic sectors where government policy is a clear tailwind rather than a headwind.”
Mortier said his firm, which oversees $2.1 trillion globally, is concentrating on clean energy and biotech stocks. “The former could benefit from China’s plans to become carbon neutral by 2060, while the latter is a cornerstone industry for the Chinese government,” he said.
While regulatory uncertainty has made Amundi more cautious on Chinese technology stocks, Mortier said that he is watching out for new national champions to develop from the local innovation drive, particularly in semiconductor, software and industrial sectors.
The selloff in the wake of Beijing’s crackdown on a large swathe of sectors erased $1 trillion from the market value of Chinese stocks listed globally last month. It has prompted some market participants to ponder whether China is at all investable. Still, money has started trickling in again, with the Hang Seng Tech Index rising 9.4% in the past two days after falling to its lowest since inception. Cathie Wood has also made her first move to get back into China tech.
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