Dragon code - Chinese equities remain our top choice in Asia

Chinese companies will emerge as long-term winners on the back of structural opportunities

Aug 21, 2018 | Invesco Asian Investment Team

In line with other emerging markets, Chinese equities have been affected this year by trade tension, the rising US dollar and yields, and geopolitical developments. We believe the heightened volatility since late January is a natural market development in which asset prices are adjusting to the new normal in the financial market, and investors should welcome its return and actively position into long-term structural opportunities.

Despite new challenges posed by external developments, some of which may have long-lasting impact, including trade tensions, changes in US monetary policy and geopolitics uncertainty, offshore Chinese equities remain our top choice in Asia given the following reasons:

•    A stable macroeconomic environment with the focus shifting to high-quality growth.
•    Continued efforts on reforms and the acceleration in further opening up the domestic market, which is a positive surprise.
•    Potential for further deployment of policy tools in countering external headwinds.
•    Multiple attractive investment themes and solid market fundamentals.

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