Mainland Chinese and Hong Kong stocks will rise in the second half as Beijing’s policy support is expected to revive earnings growth, according to Standard Chartered and UBS Group.
Standard Chartered was overweight on allocations to Chinese equities due to the de-escalation of tariff tensions with the US following the signing of a framework agreement last week, the UK bank said in a report on the second-half outlook on Monday.
The bank said it preferred Chinese offshore stocks to onshore ones because many of them were growth companies that had strong upside potential and their valuations were lower than their peers in the US and Europe.
Meanwhile, UBS predicted that the premium of mainland China-listed A shares to their Hong Kong counterparts would further narrow this year as more Chinese institutional investors hunted for bargains in Hong Kong via the Stock Connect trading link.
