Equities in emerging markets have reached a trough and are expected to pick up soon, said Victoria Mio, co-head of Asia Pacific equities and chief investment officer for China at Robeco Group.
Robeco has upgraded the ratings of emerging-market equities to “slightly underweight” from “significantly underweight”, the Hong Kong Economic Journal reports.
There is not much chance for emerging-market equities to drop further after five years of underperformance compared with mature markets, Mio said.
Counters in technology and innovation, including electronic commerce, cloud computing, Internet of Things and mobile payment, as well as consumption plays in tourism, entertainment and sports, are among the asset management firm’s top picks among Chinese stocks.
Two other key themes are healthcare and infrastructure related to China’s “One Belt, One Road” initiative.
But she said stocks in the industrial, banking and insurance, energy and telecommunications sectors have less favorable outlooks.
The decline in industrial activities and rise in the unemployment rate and bad debts are likely to take a toll on the services sector, which is crucial to the Chinese economy, Mio said.
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