China’s investment outlook: Where to find opportunities in 2023
Ending zero-Covid is no panacea for China’s attractiveness as an investment destination. That’s according to Flagship Asset Management’s Kyle Wales, who joins the show to share is cautious approach to a market that has run hard following the lifting of the Covid rules in December. CNBC Africa is joined by Kyle Wales, Portfolio Manager at Flagship Asset Management joins CNBC Africa for more.
Tue, 31 Jan 2023 11:48:50 GMT
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AI Generated Summary
- Policy uncertainty and market risks in China following recent events have raised concerns among investors
- Flagship Asset Management adopts a cautious approach, adjusting exposure to Chinese assets below 5% of its portfolio
- Focus on other regions such as Japan, the UK, and Europe due to favorable valuations and improving economic conditions
China's investment landscape has been a focal point for many investors, especially following the lifting of Covid-19 restrictions in December. However, despite the excitement around China's reopening, there are lingering concerns about the risks associated with investing in the country. Kyle Wales, Portfolio Manager at Flagship Asset Management, shared his cautious approach to navigating the Chinese market in a recent interview with CNBC Africa. Wales pointed out that while growth prospects in China are enticing, the underlying risks cannot be ignored. One of the key reasons for his apprehension is the policy uncertainty that has emerged in the wake of recent events such as the delisting of Ali Baba and the crackdown on China's private education sector. These factors have eroded investor confidence and raised questions about the stability of the market. Wales emphasized the importance of considering both growth potential and risk when evaluating investment opportunities. He highlighted the need to reevaluate the valuation of Chinese equities in light of the changing policy landscape and macroeconomic uncertainties. As a result, Flagship Asset Management has adjusted its exposure to Chinese assets, keeping it below 5% of its portfolio. Wales underscored the firm's active and concentrated investment strategy, with its main exposure to China limited to Alibaba. Looking beyond China, Wales expressed optimism about other regions such as Japan, the UK, and Europe. He cited factors such as favorable valuations, potential monetary policy changes, and improving economic conditions as reasons for increased interest in these markets. In contrast, Flagship Asset Management holds minimal exposure to South Africa currently, with a focus on seeking opportunities elsewhere. While not ruling out future investments in South Africa, Wales emphasized the importance of identifying compelling opportunities within the firm's concentrated portfolio of 25 stocks. The cautious approach taken by Flagship Asset Management reflects the complex and evolving nature of the global investment landscape, where balancing growth potential with inherent risks is essential for long-term success.
