Fund manager’s at BlackRock Inc. said Hong Kong traded stocks have become “extremely attractive” after recent declines, pointing towards an opportunity after Beijing vowed to stabilize financial markets.
“In a crisis, some valuations can reach levels previously not thought possible, the world’s biggest asset manager’s China-registered unit said in a letter to investors” on its Wechat account Monday. Hong Kong-traded stocks are mostly Chinese companies, the asset manager said.
BlackRock, which became the first foreign firm allowed to start a wholly-owned mutual fund business in China, said it will reopen its second local fund to subscriptions after the initial launch two months ago. The fund is down 6.5% since inception, according to distributor data. The Hang Seng Index is down 8.9% this year.
Chinese equities fell on Monday as investors remained concerned that there may not be enough policy support to bolster growth, even after Vice Premier Liu He’s vow on March 16 to stabilize markets helped spur a rally.
BlackRock joins two of China’s five biggest quant hedge funds pointing to what they see as long-term value in Chinese stocks after recent market turmoil.
BlackRock’s China fund favors new energy, financial and consumer stocks, according to a separate statement.
