Markets are more willing to see China as a 'glass half full story': Strategist

was would you see the glasses half full rather than half empty yeah I mean interesting you you put it this way I think in January the glass was half full but Market sentiment was very very negative on China because it was AI was too strong Japan was too strong China was just too hard so F flow was very unfavorable on China everyone see China as glass half empty story so we see much more severe derating than what the fundamental was probably deserved where whereas in the past two three weeks we see fun flow coming back to China not necessarily because China fundamentally has so much dramatic change in the past one months but also more probably because of what's happening in rest of the world in terms of the Fed rate decision in terms of what's happening with the Japanese y what's happening with the AI cycle So currently seems the market is more willing to see China as the glass half full story but I would still say fundamental turn around will be a a quite long-term story that property market for example home buyers are not going to suddenly believe say Hey you know we're going to go back and put that 5 million 10 million R&B to buy the next property the turnar around will take time yeah let's pick up on that uh that that theme uh Winnie because there seems to be a lot of attention on the wording and the language coming from the authorities right now with regards to how they're going to deal uh with with the uh inventory right now the unfinished projects um there seems to be sort of a wait and see approach as to you know whether Beijing will will come up with some sort of central funding um for now but in the meantime we've had a lot of excitement around the likes of hongo coming out and removing uh those purchasing restrictions so um when you say it will take some time when do you think could be the turning point and what do you think needs to be done um in terms of um a catalyst of for some sort of more meaningful upside um for investors to uh to to get into this yeah so on the property side there are pro there there are demand and supply side issues right on the demand side I think what gum the policies has been focusing on more recently is uh abolishing the purchase restriction policies so that market demand can be truly fully reflected currently I see in China there are only six cities or regions that still have some level of purchase restriction but besides those it's mostly abolished so Market true demand will be better reflected whether it's driving price or volume up or down we'll see soon and on the other side on the supply side you know I think the the very important change seems to be government policy now is more focusing on D stocking so potentially using the government funding to acquire and finish a project to ensure the project completion and to contain the overall supply of you know new stocks coming to the market which will also help but to your point where is the funding right is central government going to provide the funding if so how is that going to be allocated across cities because property is a very localized market right the challenges shenen face is very different from the market condition in changa for example so is it fair to allocate say 100 million 100 billion to each and every city if not how is the central government funding be allocated or are they going to use some of financial institutions money or going back to rely on local government funding vehicle or local s soe so I think until we see better Clarity um you know the real execution of the destocking process will probably still be a a relatively long process

Channel: CNBC International TV

Views: 1,530

Keywords: CNBC

Id: 6Y_BDvCYGNk

Length: 3min 53sec (233 seconds)

Published: Fri May 10 2024