As hurdles for sustainable recovery in China equity markets continue, with mounting macro pressure on earnings amid currency weakness, will fund managers rejig their China equity-focussed portfolio and look somewhere else in 2024? Chui, portfolio manager, Franklin Templeton Emerging Markets Equity, shares his thoughts
The year 2023 has been a year of challenges for China with growing concerns on debt and deflation as the economy re-opened following strict lockdowns due to the zero-Covid policy. The China equity markets have been weak among emerging markets peers while corporate earnings have struggled in an environment of high interest rates globally and weak local currency. Global investors have started to look elsewhere for better opportunities in the year. The perspective is going to shift gradually, Nicholas Chui, portfolio manager, Franklin Templeton Emerging Markets Equity, tells Forbes India. “Looking forward to 2024, I think the ingredients are there to allow for a recovery to be a lot more sustainable, as well as broadbased. What we are looking out for is how this recovery broadens out,” adds Chui who manages China equity strategies. Edited excerpts: