(Bloomberg) — Global investors are seeing signs of improving sentiment toward China, though it will take more conviction for big, long-only funds to return.
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That’s the conclusion of many investors congregating at the Milken Institute Global Investors’ Symposium in Hong Kong on Monday.
The chief executive officer of Blue Pool Capital, which helps oversee billionaire Joe Tsai’s fortune, said he’s seen an increase in foreign investors visiting Hong Kong, including private equity, hedge funds and long-only managers.
“This is the core to bringing Hong Kong to the place it should be,” Oliver Weisberg said during a panel.
The warming sentiment was echoed by others. There’s “absolutely room” for China’s stock market rally this year to continue after artificial intelligence firm DeepSeek reignited investor interest, Janet Perumal, head of Asia-Pacific at Wellington Management Singapore Pte said during an interview with Bloomberg Television.
Chinese stocks have rebounded this year, particularly in Hong Kong, as the government stepped in with more measures to salvage its ailing property market, boost consumption and support private enterprises. Global investors have been diversifying from the US, as Donald Trump’s “America First” strategy adds risks to the global economy.
Perumal said Chinese company valuations are still significantly lower on a global basis, especially compared with the US. Global investors have under-appreciated the quality of some Chinese firms such as the internet sector, she said, citing higher margins and better shareholder returns.
While the Hang Seng Index in Hong Kong has rebounded nearly 18% this year, investors are looking for more evidence that this rally isn’t just another false start. China’s domestic stock index by contrast has been little changed.
Big pensions and long-only funds still remain on the sidelines. Aaron Costello, head of Asia at Cambridge Associates, which helps institutional investors allocate capital, said global investors haven’t been buying the China rally yet. Most of the inflows into Hong Kong are from the mainland, and most active managers are underweight China, he said during a panel.
Marc Antaki, deputy chief strategy and risk officer of Mubadala Investment Co., said his fund has stayed invested in China even when other global peers pulled out of the country.
