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Schroder: Valuations of the mainland China and Hong Kong stock markets have bottomed out. We are waiting to see if the Third Plenum will announce a loosening policy.
Schroder Investment believes that the mainland China and Hong Kong stock markets are in the early stages of recovery, and stock valuations have already hit bottom.
Schroders global Investment believes that the mainland China and Hong Kong stock markets are in the early stages of recovery, with stock valuations hitting bottom, foreign capital showing signs of re-entry, and driving a wave of upward momentum in the market. However, in order for the stock market to maintain a long-term uptrend, authorities need to introduce more loose and supportive policies. At the current stage, a neutral view is held on the mainland China and Hong Kong stock markets, and we are waiting to see if more loose policies will be announced at the Third Plenum of the 20th Central Committee of the Communist Party of China in July this year. Shek Hong Yu, Director of Diversified Asset Investment at Schroders global Investment, stated that compared to other regions around the world, the diverse Asian region can be subdivided into different markets such as China, India, Japan, and South Korea, each with its own unique structural growth opportunities and industry themes. It may be time to refocus on Asia. Additionally, investors can find stocks in the Asian market that offer both growth and return, but it is crucial to understand the economic situation and local industry ecology of different regions. For example, the leading chip manufacturing industries in China, Taiwan, and South Korea, corporate governance reform in Japan, and a youthful population in India all contain different investment opportunities.
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