BlackRock Says Hong Kong Stocks ‘Extremely Attractive’ Post Rout

  • China fund managers wrote of valuations in letter to investors
  • World’s biggest asset manager reopens fund to subscriptions

BlackRock Inc. fund managers said Hong Kong-traded stocks have become “extremely attractive” after recent declines, hinting at opportunity as China’s regulators move to stabilize battered 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.

Lingjun Investment urged clients on Sunday to keep hold of assets with a longer-term perspective in mind. Ubiquant on Friday pledged to plow 10 million yuan ($1.6 million) into its own stock products every month for three years, adding to an earlier vow of 100 million yuan in January.

BlackRock’s China fund favors new energy, financial and consumer stocks, according to a separate statement.

Source: Bloomberg

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