Global
Investment
Outlook
2017
Global investors have been wary of embracing China on concerns of an increasing
debt load, persistent capital outflows and a potential trade war with the U.S. Yet today
there are powerful structural and cyclical forces in play that make Chinaˉs equities
attractive, we believe. An overly cautious approach may mean missing out on fresh
returns from the worldˉs second-largest economy.
Highlights
BlackRock GPS, to support Chinese equities. Progress on domestic structural
reforms and undemanding valuations add to Chinaˉs attractions.
close attention to policy priorities and using new data sources to generate ideas.
We believe big data can help supplement traditional fundamental analysis.
U.S. protectionism. Yet trade is a smaller growth driver than in the past, and China
is strengthening ties within Asia and making its economy more consumer-driven.
Performance conundrum
Chinese equity returns have trailed the nationˉs spectacular growth since 2000,
underperforming other emerging markets such as India. China H-shares ¨Clisted on
foreign exchanges such as Hong Kong ¨Chave fared better than A-shares ¨Cwhich are
listed on onshore exchanges. See the chart below. Structural problems (resulting from
the 2009 stimulus) and declining multiples have weighed on equity returns since the
financial crisis. Earnings growth has been solid, but high levels of investment left less
free cash flow to distribute to shareholders. We see these dynamics changing as
policy makers press ahead with reforms, domestic and offshore valuations converge
and China is admitted to global equity indexes.
GLOBAL EQUITY OUTLOOK FEBRUARY 2017
Warming up to China
Kate Moore
Chief Equity Strategist, BlackRock
Investment Institute
Gerardo Rodriguez
Portfolio Manager,
Emerging Markets
RuiZhao
Portfolio Manager,
Asia-Pacific and China Equities
Helen Zhu
Head of China Equities,
Active Equity Group
Sources:BlackRock Investment Institute, MSCI, Thomson Reuters and HaverAnalytics, February 2017.Notes:
Annualized, dollar-denominated equity returns are based on MSCI national indexes; annualized GDP growth
percentages are based on the countriesˉ national accounts.
When investors arenˉt fully rewarded
Global equity performance versus real GDP growth, 2000-2016
Changing mix
Domestic investors ¨Cprimarily retail ¨Cbuy shares in Chinaˉs
onshore markets while international investors access China
through offshore H-shares. Both indexes are made up of
companies with low direct foreign sales, we estimate, with
10% of A-share company revenue coming from abroad and
a slightly higher level for H-shares.
Onshore shares ar
。。。以上简介无排版格式，详细内容请下载查看