Asia’s wealthy and their bankers are optimistic about a recovery in China, betting that exposure to the region, even amidst a slowdown, will be beneficial in the long run.
Piyush Gupta, Chief Executive of DBS Group, emphasized the importance of looking beyond short-term cycles during an interview at the Reuters NEXT conference in Singapore.
Despite current challenges, including a property crisis, many believe China will eventually drive regional growth.
The commitment of the region’s top businesses and money managers indicates a solid foundation for the return of foreign capital. Although China’s economy grew 5.3% in the first quarter, surpassing forecasts, weaknesses in consumption and property, along with sluggish equity markets, persist.
The CSI 300 hit a five-month low, reflecting these short-term headwinds.
Gupta noted that the property market hasn’t yet stabilized, but he believes that taking a long-term perspective, similar to what succeeded in the U.S. over the last century, is promising for Asia.
Foreign investment in Chinese stocks has been volatile, with a net inflow of 22.4 billion yuan ($3 billion) this year, despite significant selling in June due to sharp home price declines.
Stefanie Holtze-Jen, Asia-Pacific chief investment officer at Deutsche Bank Private Bank, highlighted the skepticism towards China, especially from the U.S.
(REUTERS)