Analysts’ 2022 outlook for Chinese assets

Investment houses have started publishing their predictions for Chinese asset prices in 2022 following a bruising year for the financial markets.

The Hang Seng equity index has gained about 4.4% so far this year after losing more than 14% in 2021.

The MSCI China index rose nearly 3% after wiping out 23% of its value last year, against a 17% rise in world stocks during the same period.

On Jan. 13, the Hang Seng was at 24,422, MSCI China at 86.082 and the blue-chip CSI300 index at 4,818.8.



“We believe Chinese stocks will have a better year in 2022 as the market recovers from a major correction and transitions into a ‘hope’ phase, where P/E expansion typically trumps weak fundamental growth and drives strong equity gains.”


“MSCI China has had its worst ever relative performance drawdown versus broad emerging markets in 2021 … despite such a record underperforming year, we still see some lingering risks skewed towards higher volatility or more downside in the near term. This makes us believe that now is not yet the right time to go bullish at a broad index level.”


“We think markets have been overzealous in selling Chinese stock … most funds are underweight and as the focus returns to growth in China, we think this market will roar back.”

* Credit Suisse

“Amid the expected relatively friendly policy environment and reasonable liquidity, we remain constructive on China A-share markets, despite the possible negative impact from the expected Fed’s tightening cycle. The Hong Kong stock market is likely to have a bigger impact from overseas macro and market volatilities, while we expect sector rotation could tilt back towards growth.”

Authors: Tom Westbrook, Winni Zhou, Reuters

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