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Global stocks rallied and the dollar dropped. The upbeat market momentum continued on Monday, with Asian stocks up after China reopened its borders, bolstering the outlook for the global economy. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose to its highest in more than six months. Redha said that there was "over-excitement" in the market reaction to the U.S. jobs data, and that more wage data would be needed. Emerging market stocks (.MSCIEF) were up 2.4% on the day, and have risen by more than 20% since their October lows.

The upbeat market momentum continued on Monday, with Asian stocks up after China reopened its borders, bolstering the outlook for the global economy. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose to its highest in more than six months. At 0811 GMT the MSCI World Equity index, was up 0.5%, near its highest since mid-December (.MIWD00000PUS). “The market is reading that wage pressures are easing quite rapidly and seeing that as positive and potentially people whispering the words “soft landing” more loudly now,” said Hani Redha, global multi-asset portfolio manager at PineBridge. Redha said that there was "over-excitement" in the market reaction to the U.S. jobs data, and that more wage data would be needed.

HONG KONG, Dec 19 (Reuters) - Asia's hedge funds are heading for their worst showing in a dozen years, with long-short stockpickers wrongfooted by volatility in China, while macro strategy funds riding big global shifts in interest rates shine. On average, Asian hedge funds fared better than the indexes, losing 9.1% through to end-November, Eurekahedge data showed. By strategy, Asia equity long-short funds lost 12% and Greater China long-short funds lost 14%, while Asia macro funds rose 12% and Asia multi-strategy rose 1%. Big picture macro funds, which trade on economic and political shifts, also performed well, as U.S.-China tension and rising interest rates roiled financial markets. Long positions in U.S. government debt and the Singapore dollar also helped through November when many macro managers were caught out by a sudden drop in the U.S. dollar.

Also last week, Sun Chunlan, China's top pandemic official, suggested the central government was rowing back on the zero-COVID policy. This is putting a fire under Chinese assets, and prompting many analysts to look on 2023 in a more positive light. Chinese stocks jumped 2% and Hong Kong stocks surged 4.5% on Monday, and the yuan rallied through the closely watched 7-per-dollar level. It has only posted three bigger daily rises since 2005, and two of them were in the last two months. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Goldman Sachs forecasts 16% index returns for MSCI China (.dMICN00000PUS) and CSI300 (.CSI300) next year and recommends an overweight allocation to China, while J.P.Morgan expects a 10% potential upside in MSCI China in 2023. Morgan Stanley upgraded its recommendation to overweight on Monday with an increase in exposure to consumer stocks as reopening prospects improve. Bank of America Securities turned bullish in November, with its China equity strategist, Winnie Wu picking internet and financial stocks to lead the short-term rebound. "We have experienced several rounds of policy back and forth in 2022," she added, referring to both COVID and property policies. UBS Global Wealth Management recommends a market-neutral allocation to Chinese stocks.

☆ Morning Bid: China reopening as volatility ebbs
▼ + stars: | 2022-12-05 | by ( ) www.reuters.com time to read: +4 min

What's more, Wall Street's 'fear index' is showing little if any trepidation about the final month of the year. Even though it backed up a bit today, the VIX index of implied S&P500 volatility (.VIX) closed at its lowest in 8 months on Friday. Morgan Stanley updated its China equity recommendation to overweight, citing "multiple positive developments alongside a clear path set towards reopening." China's yuan , surged past 7 to the dollar in onshore and offshore markets - its best levels in almost three months. The China re-opening optimism buoyed the oil price even as OPEC+ nations at the weekend held their targets steady despite last week's market speculation of another output cut.

☆ China's COVID policy is top of mind for investors as unrest rattled markets this week. Here are 5 things they're watching as Beijing signals willingness to loosen some restrictions.
▼ + stars: | 2022-12-03 | by ( Carla Mozée | ) www.businessinsider.com time to read: +6 min

Chinese cities this week loosened COVID restrictions in the wake of mass protests, lifting Chinese stocks. China's top pandemic official this week appeared to signal a softening in the zero-COVID policy but the government has yet to pledge a comprehensive step-down. Retail investors should be prepared to move defensively should Beijing's decisions on zero-COVID policy go against their respective positions, Martin said. Here's what some market experts are looking at as global investors watch for developments surrounding the Chinese government's zero-COVID stance. "You have to understand that nobody has an edge as to predicting China policy anymore.

☆ Hong Kong's Hang Seng had its best month since 1998, but remains in bear market territory
▼ + stars: | 2022-12-02 | by ( Jihye Lee | ) www.cnbc.com time to read: +3 min

Strategists at Goldman Sachs said from February 2021 to October 2022, the Hang Seng index saw a "systemic correction," which the firm defines as a fall of 40% or more. Next key levelsAnalysts at Weiss Multi-Strategy Advisers said, "November may, in hindsight, be viewed as a key turning point for Chinese equities," noting the Hang Seng China Enterprise index and the property sector saw significant gains. After its November gains, the Hang Seng index hovered around 18,600 – a level of resistance according to market watchers. "With the 18,600 level of resistance being overcome for the Hang Seng Index, that could seem to place the key psychological 20,000 level on watch," IG market strategist Yeap Jun Rong said in a Thursday note. The HSI last fell below the 20,000 level in August, and analysts expect to see a continued rebound in the equity market on further signs that the nation will shift away from zero-Covid.

The same funds averaged a decline of 0.58% in 2021, according to the HSBC data seen by Reuters. HSBC follows eight funds which take long and short positions in Chinese equities. This year, three hit HSBC's global list of the bottom 20 hedge fund performances for the week ending Nov. 4. The $1.9 billion Golden China fund from Greenwoods Asset Management, was down 45% for the year to Oct. 31; the $152 million Zeal China Fund from Zeal Asset Management, was down 38% for the same period; and the $156 million Telligent Greater China fund from Telligent Capital down almost 40%. HFR, another company which tracks hedge fund performance but does not disclose the constituents of its indices, said its index of Chinese hedge funds was down 27% so far this year.

These same funds averaged a 0.58% decline in 2021, according to the HSBC data seen by Reuters. HSBC follows eight funds which take long and short positions in Chinese equities. This year, three hit HSBC's global list of the bottom 20 hedge fund performances for the week ending Nov. 4. Net selling of Chinese equities by international active funds totalled around $30 billion over the past year and global hedge fund allocations in Chinese equities have declined from 15% at the 2020 peak to 8% now, Goldman Sachs estimates. HFR, another company which tracks hedge fund performance but does not disclose the constituents of its indices, said its index of Chinese hedge funds was down 27% so far this year.

☆ PineBridge, Man Group bet on China as reopening hopes fuel markets
▼ + stars: | 2022-11-04 | by ( Joice Alves | Karin Strohecker | ) www.reuters.com time to read: +4 min

LONDON (Reuters) -Asset manager PineBridge Investments’ multi asset team has sharply raised its China equity exposure and rival Man Group expects to expand its presence in the country with expectations that strict COVID rules will be eased. “Europe is going into recession now, the U.S., maybe, sometime next year, but China’s already had a recession ... The next leg is up for Chinese equities, it’s a question of when, and the main driver would be the reopening,” Redha said. China’s economy rebounded faster than anticipated in the third quarter though the revival was challenged by COVID-19 curbs, a prolonged property slump and global recession risks. However, a foreign ministry spokesman later said he was not aware of the report, calling China’s COVID policies consistent and clear.

Chinese equities make up 31% of the MSCI Emerging Market index (.MIEF00000PUS), a popular stock index that many funds track and benchmark their performances against. Fund research firm Morningstar tracks nine new emerging market ex-China equity mutual funds and exchange-traded funds (ETFs) that were created this year, matching the number of launches in total over the previous two years. If Aubrey was to remove China from its emerging market strategy, the Indian market would take a significant portion, while the rest will be spread around other countries including Vietnam, Brazil and Mexico, he said. OUTFLOWSAndrew McCaffery, Fidelity International's global chief investment officer, said they have received increased requests from clients for emerging markets excluding China strategies, although the purpose was to “break China out as an allocation separately within global portfolios”. “The challenge is that they (global investors) are not going to be quick to add back in,” he said.

☆ China equity selloff not on fundamentals, creates opportunity - JPM
▼ + stars: | 2022-10-24 | by ( ) www.reuters.com time to read: +1 min

A men wearing a mask walk at the Shanghai Stock Exchange building at the Pudong financial district in Shanghai, China, as the country is hit by an outbreak of a new coronavirus, February 3, 2020. REUTERS/Aly SongOct 24 (Reuters) - Monday's selloff in Chinese equities does not correspond with fundamentals and creates an opportunity for investors, analysts at JPMorgan said on Monday. "We believe this is a good opportunity to add given an expected growth recovery, gradual COVID reopening, and monetary and fiscal stimulus," wrote the bank's analysts in a strategy note, adding that growth data in China was a positive surprise over the weekend. Hong Kong stocks (.HSI) fell 6.4% on Monday while a Shanghai index (.SSEC) dropped 2% after Xi Jinping's newly unveiled leadership team heightened fears that economic growth will be sacrificed for ideology-driven policies. Register now for FREE unlimited access to Reuters.com RegisterReporting by Rodrigo CamposOur Standards: The Thomson Reuters Trust Principles.

☆ These beaten up U.S.-listed Chinese stocks are reading at attractive levels, Evercore ISI says
▼ + stars: | 2022-10-18 | by ( Carmen Reinicke | ) www.cnbc.com time to read: +2 min

There may be an opportunity for investors to boost performance by snapping up shares of U.S.-listed Chinese stocks trading at a relative discount to their pandemic highs, according to Evercore ISI. "Despite the obvious challenges, we view risk/reward as attractive," analysts led by Julian Emanuel wrote in a Sunday note. "China US ADRs that have fallen significantly from their Pandemic Peak but have had favorable 2023e EPS revisions — could outperform." Evercore ISI screened for US-listed Chinese American depository receipts, or ADRs, with a market capitalization about $1 billion and that are down more from their pandemic peaks than Hong Kong's Hang Seng Index, which has fallen 47% this year. Evercore also sees a steep skew of expensive downside puts versus upside calls in the iShares China Large Cap ETF (FXI).

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