As if the pandemic wasn’t warping global markets enough, China’s regulatory crackdown is suddenly adding new unpredictability. So how best to invest in these strange times?
Bloomberg News spoke with institutional investors with $3 trillion in combined assets under management to ask how they’re navigating economic turmoil caused by unpredictable recoveries and China’s shifting rules, which have frozen U.S. listings and almost erased the online education sector.
Some are ramping up allocations to hedge funds--reversing a years-long retreat--hoping that active management can plot a path through a landscape of Covid-19 lockdowns and rebounds. Others are switching to undervalued stocks in Europe and India, avoiding the U.S.-China regulatory fracas.
All recommended heightened caution and warned of a difficult recovery ahead.
What follows is a look at their strategies.
Temasek Holdings: AUM of S$381 billion ($283 billion)
Over the next 12 months, Singapore’s massive state-owned investor will look to companies that focus on digitization, e-commerce, cyber-security providers and increased sustainability, according to Nagi Hamiyeh, joint head of its investment group. The latter comes amid a rising tide of investors seeking to make their portfolios greener.
None of this is entirely new. Temasek and others have plowed billions of dollars into these themes for years. But where some believe it’s fully-priced, Hamiyeh said there was still room to grow.
Temasek remains bullish on China over the long term. Bets in the country account for 27% of its portfolio. Hamiyeh spoke with Bloomberg in mid-July, when China was in the midst of demonstrating its ability to inflict short-term pain. Investments in ride-hailing service Didi Global Inc. were tumbling. Since then online education providers have been eviscerated, and tensions with U.S. securities regulators have flared anew.
Still, Hamiyeh expressed optimism that valuations of Chinese companies will climb over time, even if companies aren’t able to access U.S. markets. A spokesman for Temasek later added it will continue to invest in themes including the future of consumption in China and elsewhere.
Read More at https://www.business-standard.com/article/finance/indian-to-china-where-investors-managing-3-trn-are-putting-their-money-121083100133_1.html
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