Defensive tilt in Chinese equities
The guest argued that investors should hide out in defensive Chinese equities, such as utilities and state banks, until market volatility subsides.
The argument
While the guest is preparing a shopping list for high-beta Chinese tech names once geopolitical and macro dust settles, he currently favors defensive sectors. He noted that onshore A-shares have structurally outperformed offshore listings.
The thesis, stress-tested
✓ What validates it
- ✓Stabilization of offshore vs. onshore outperformance trends
- ✓Positive inflection in sell-side earnings revisions for Chinese tech giants
▸ Risks discussed
- ▸Geopolitical escalation in the Middle East affecting global risk appetite
- ▸Negative earnings revisions continuing to plague broader emerging market tech
Hear it yourself
"The A shares in China have outperformed the offshore stocks, you know, remarkably well. And, you know, I I wrote at the beginning of the year how it did look that a a major trend line of offshore outperforming onshore was was was breaking breaking up, and those those trends can persist for a long period of time."
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