Investors now expect China markets to stage a recovery in the second half of 2023. "(China) markets have baked in a lot of the doom and gloom in the economy given the declines since January's peak," said macroeconomist Aidan Yao. If it is the case, spreads will start to tighten across the board," said Monchau, adding that China is under-represented in portfolios. Franklin Templeton expects the recovery in Chinese markets to happen in stages, with opportunities in the industrial equipment and banking sectors. "China (is) at the nadir of its business and profits cycle, but also offering what we consider compelling valuations."

---

Persons: Aidan Yao, Yao, Goldman Sachs, Charles, Henry Monchau, Mark Haefele, Franklin Templeton, Anisha, Divya Chowdhury, Hugh Lawson Organizations: Investors, Reuters Global Markets, Syz, UBS, Thomson Locations: COVID, U.S, Japan, Germany, China, Asia, Bengaluru