Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Citibank prefers Chinese stocks, JPMorgan sees safer bets in bonds, real estate amid political risks in 2020

Citibank prefers Chinese stocks, JPMorgan sees safer bets in bonds, real estate amid political risks in 2020

Citibank likes Chinese internet and banking stocks, 5G smartphone makers amid protests, US-China trade war. Bonds, real estate may be safer bets for stable income as trade war, Brexit and US elections make 2020 a tougher year to navigate: JPMorgan Asset Management

Chinese internet stocks and smartphone makers are likely to be among a few winners in 2020, providing shelter to investors amid lingering political risks in Asia, US and Europe, according to Citibank. Bonds and real estate are seen as better bets by JPMorgan Asset Management.

Despite an impending agreement to the “first phase deal” in the trade war, global political uncertainty and anti-government protests are likely to continue weighing on investor sentiment for much of 2020, said Wong Pak-ling, head of investment strategy and portfolio advisory at Citibank Hong Kong.

“A great deal of political risk remains in the markets,” Wong said in a briefing when sharing its outlook for the market on Thursday. “Investors should be aware that the US-China trade dispute will be a long-term issue and will not be resolved in the short term. It will become a new normal.”

For Hong Kong, 2020 has started like the end 2019 as anti-government protesters clashed with police over their political demands. HSBC Holdings has become the latest target, following after popular groups alleged to have links to mainland political interests.

Under this backdrop, Citibank believes Chinese internet stocks will perform well, boosted by the consumption upgrade among mainland consumers who are seen driving the domestic growth engine as exports falter.

The advent of fifth generation or 5G technology, Wong said, is expected to spur mobile-phone makers by pumping up sales of smartphones in the world’s largest consumer market.

His other pick is mainland banking stocks, which are expected to play a greater role in funding the local economy. China’s economy grew in the third quarter last year at the slowest pace since 1992. China’s economic growth is forecast to slow further to 5.8 per cent this year, and 5.6 per cent in 2021, Citibank said.

The US-China trade war, which has lasted for more than 18 months, has fuelled a roller-coaster ride for Hong Kong investors in 2019. The year, which started with a bang in the first quarter, soon petered out as protests took a violent turn and pushed the economy into a technical recession in the third quarter. Retail sales, tourism and hotel occupancy have posted steep losses last year.

Citibank’s positive view on some Chinese stocks follows measures announced by policymakers in the new year to underpin economic growth in 2020.

China’s central bank announced a move to unleash 800 billion yuan (US$115 billion) from the banking system to support the economy, sending a pro-growth message on the first day of 2020. The People’s Bank of China will reduce the deposit reserve ratio from January 6 to support the economy.

JPMorgan Asset Management believes the US election and Brexit will also create uncertainty, making political issues “front and centre for investors,” according to Hannah Anderson, global market strategist.

“Not only does the upcoming US election mean investors will be inundated with political headlines but we also have a full year of the Brexit process to watch for twists and turns in, and the US-China trade war is far from resolved.”

In the meantime, investors are likely to look for stable income from other sources, “like real estate or high quality corporate credit,” Anderson said.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
Italy Faces Population Decline Amid Youth Emigration
Trump Accuses China of Violating Trade Agreement
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Russia Accuses Serbia of Supplying Arms to Ukraine
Gerry Adams Wins Libel Case Against BBC
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
EU Majority Demands Hungary Reverse Anti-LGBTQ+ Laws
Top Hotel Picks for 2025 Stays in Budapest Revealed
Iron Maiden Unveils 2025 Tour Setlist in Budapest
Chinese Film Week Opens in Budapest to Promote Cultural Exchange
Budapest Airport Launches Direct Flights to Shymkent
Von der Leyen Denies Urging EU Officials to Skip Budapest Pride
Alcaraz and Sinner Advance with Convincing Wins at Roland Garros
EU Ministers Lack Consensus on Sanctioning Hungary Over Rule of Law
EU Nations Urge Action Against Hungary's Pride Parade Ban
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
U.S. Considers Withdrawing Troops from Europe
Russia Deploys Motorbike Squads in Ukraine Conflict
Critics Accuse European Court of Human Rights of Overreach
Spain Proposes 100% Tax on Non-EU Holiday Home Purchases
German Intelligence Labels AfD as Far-Right Extremist
Geert Wilders Threatens Dutch Coalition Over Migration Policy
Hungary Faces Multiple Challenges Amid EU Tensions and Political Shifts
Denmark Increases Retirement Age to 70, Setting a European Precedent
Any trade deal with US must be based on respect not threats', says EU commissioner
UK Leads in Remote Work Adoption, Averaging 1.8 Days a Week
Thirteen Killed in Russian Attacks Across Ukraine
High-Profile Incidents and Political Developments Dominate Global News
Netanyahu Accuses Western Leaders of 'Emboldening Hamas'
Ukraine and Russia Conduct Largest Prisoner Exchange of the War
×