The Chinese market is back in the spotlight after the government implemented a series of stimulus measures in recent weeks. However, investors were disappointed by news on Friday of a five-year 10 trillion yuan ($1.4 trillion) debt swap program that fell short of calls for more direct support for the economy. For many market participants, including Pella Funds’ Jordan Cvetanovski, this means taking a longer-term view when investing in the Asian powerhouse. “I think the right way to really look at what China is doing is to look at it as a process,” he told CNBC’s “Street Signs Asia” on Monday. “Markets are always impatient. They want to see a sugar high immediately. , they want to see a big bazooka… However, as we have discovered over the years, the Chinese government… in more measured fashion Cvetanovski, founder, chief investment officer and portfolio manager of Pella Funds. Adding, “More patient, longer-term investors will be rewarded by looking at the bigger picture. His comments came as China’s Ministry of Finance said on Friday it may provide more fiscal support next year. It also said the near-term focus is on resolving local government debt. Looking ahead, Paul, founder and economist of the East Asia Economic Research Institute ·Kevey said there will be more stimulus measures, especially considering that President-elect Trump may increase tariffs. Kerry told CNBC that he expects to introduce two policies: One is fiscal support to “address the housing market.” “Some of the excess inventory”; the second is to take measures to help promote new areas of growth in response to any additional tariffs on U.S. exports. Stocks to Watch As investors think about how to navigate the Chinese market, Bernstein said there are attractive opportunities in “growth, high-volume stocks (consensus) in policy-led rebounds.” “Cheap valuations, declining equity risk premiums, improving profit support (financial, real estate, utilities, healthcare, technology, materials show signs of downgrade bottoming) and low positioning (GEM funds underweight China -2.4%, A 0.7% overweight in India (end-September) still makes Chinese stocks attractive,” the investment analyst wrote in a report on November 6. Among the bank’s outperforming stocks are tech giants Tencent and Meituan. The bank’s analysts describe Tencent as “the most ‘fire and forget’ stock idea in the sector, especially as the company’s return on capital grows with earnings.” Meanwhile, they view shopping platform Meituan as “the future It has been the fastest growing brand in China’s Internet field for several years.” Bernstein sets the target price for Tencent at HK$540 (approximately US$69.47) and Meituan at HK$220, which gives them potential upside of approximately 30% and 18% respectively. Tencent and Meituan both trade as American depositary receipts (ADRs) on the Hong Kong exchange and in the United States under the ticker symbols TCEHY and MPNGY. —CNBC’s Evelyn Cheng and Michael Bloom contributed to this report.
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