BlackRock’s Chris Hall Sees China A-Shares Opportunity in Recent Market Volatility

By Stephanie Tsui

The Chinese A-Share market has plummeted around a quarter in the past month and is regaining its lost ground since last week under strong interventionist policies by Beijing. This upward trend has been highlighted by BlackRock in a media briefing session this week, for which the investment experts believe there is an indication of A-Share opportunities.

The Shanghai Stock Exchange went into a tumble since June 30th and the overwhelming bearish market has sent the Shanghai Composite Index to its lowest point of 3507.192 on July 8th. The Index has since been gaining ground and closed at 3970 on July 13, almost rising back to its last high.

Chris Hall, Co-head of Asian Equity Research, BlackRock dismisses the grave systemic risks and believes that it is the time to catch on to this upward trend, “The recent volatility in the Chinese stock market brings about opportunities to invest in A-Shares.”

“It is a technical issue, disregard economic fundamentals. The valuation of Chinese companies has become attractive as the fundamentals of these companies start to stabilize due to the Chinese government’s reform.” Hall noted.

At a time when many blame the crash of Chinese A-shares in the past month on the unwinding of margin lending that once helped propel Chinese stocks to rise dramatically, Hall does not think the current situation is too severe. “The current level of 3%-4% is relatively low considering the capitalization scale of the Chinese market.”

Despite an optimistic mood, Hall emphasized that the high number of A-shares still in trade suspension was the reason that triggered global investors in Hong Kong to scale back on mainland-listed shares, leading to the intense fluctuation in the Hong Kong stock market last week. BM