Global Matters Weekly – 23 August 2021

Experts’ view on China

by Lorenzo La Posta, CFA

When you invest with so many high-quality fund managers, it’s only natural to pick their brains every now and then. We have spoken to a few of them and collected their thoughts on the current situation in China.

As a background, around nine months ago, in November 2020, Ant Financial (Alibaba’s fintech business) was ready to break records with a $37 billion IPO and an estimated valuation close to $300 billion. However, the Chinese regulators pulled the plug on it, officially because of risks around financial security. Since then, the clampdown has extended more broadly, reaching the wider internet and e-commerce sector, property developers, the ride-sharing company Didi Chuxing and the entire private education sector. Markets and more broadly investor sentiment has been under pressure and Chinese stocks are now trading at around 30% below their February peak.

Market Snapshot

  • Global equities fell -1.4% last week
  • The delta variant of coronavirus continues to weigh on
    investor sentiment, not helped by reports of weakening
    vaccine efficacy
  • Brent crude fell -7.7% over the week to $65.2 a barrel
  • Gold rose 0.1% to $1781 per ounce