What could change for Chinese equities?
FXI•The CSI 300 has fallen for 11 straight weeks and is about 19% below its June peak. Gavekal Research’s Louis-Vincent Gave identified five possible catalysts for a turnaround, while the yuan closed at its strongest level against the dollar since June 2022.
1. Five possible catalysts
Louis-Vincent Gave, founding partner of Gavekal Research, cited a possible return to a more market-friendly stance in Beijing, easing geopolitical tensions, a stall in the AI trade, a stronger yuan and rising inflation as potential catalysts for Chinese equities. He said the possibilities are not mutually exclusive and that a simultaneous occurrence could make a move higher in Chinese stocks “quite momentous.”
