Pictet Wealth Management is back in Chinese stocks after an 18-month hiatus

The logo of Swiss private bank Pictet appears at a branch office in Zurich, Switzerland on February 2, 2022. REUTERS/Arnd Wegmann

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HONG KONG (Reuters) – The wealth management arm of Swiss bank Pictet Group is buying back Chinese shares after more than 18 months of shirking the asset class, joining other foreign investors as they bet the economic outlook will improve and less. organizational intervention.

Alexandre Tavazi, chief investment officer of Pictet Wealth Management in Asia, said the unit, which manages $291 billion, began adding Chinese stocks again last week through its discretionary portfolios, mandates designed for wealthy clients.

“We have lowered the growth rates for the US and Europe. So when we look at the overall market situation, we see one country that stands out in terms of re-acceleration from here, and that is China,” he said in an interview on Tuesday. .

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That’s why we thought it made sense to go back to Chinese stocks.

China’s relaxation of travel rules due to the coronavirus, along with other policy signals, is beginning to lure some foreign investors back into Chinese stocks, increasing the chances of the market continuing its recovery after months of heavy selling. Read more

Tafazi said Pictet exited Chinese stocks in December 2020 due to growing doubts about slowing economic growth as well as a regulatory crackdown on the country’s technology sector.

He added that the wealth manager now expects strong stimulus policies to revive growth momentum in the second half and into 2023 and also sees stock valuations as attractive.

China’s main index rebounded (. Read more

Tavazzi said Pictet’s allocation to Chinese stocks has so far been small, accounting for a quarter of exposure to emerging market assets in managed portfolios. Chinese stocks weigh about a third in the MSCI Emerging Markets Index (.dMIEF00000PUS).

He said the wealth manager plans to increase his position in Chinese stocks over time if the economic acceleration in China after the relaxation of epidemic-related rules is as expected.

However, for now, Pictet is closely monitoring responses to ongoing small outbreaks of COVID-19 in cities like Shanghai as well as facilitating policies in the technology and property sectors in particular. Read more

Beijing in recent months has softened the harsh regulatory intervention that began in late 2020 when authorities abruptly withdrew the initial public offering of the fintech giant’s conglomerate, later expanding to include several industries, including technology, private education and property.

“Everything is a moving part,” Tafazi said. “When you get back into the water, you start working very gradually before you go deeper.”

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Reporting by Xie Yu; Editing by Sumit Chatterjee and Jimmy Farid

Our Standards: Thomson Reuters Trust Principles.

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