In June, Jian Shi Cortesi (石堅) said she sold Chinese Internet companies as the sector’s valuation had reflected earnings-growth optimism.
The MSCI China Information Technology Index had already started its descent, and has lost 34 percent since its peak in January.
Now, she has some new calls.
With Asian stocks trading at a near-record discount to their US peers, the portfolio manager at GAM Investments said the time is ripe for selling some defensive stocks and going fishing for opportunities.
In her hunt for good deals, she is looking at three areas:
First is Chinese Internet firms, which have seen shares tank on policy headwinds, creating an opportunity to buy.
“I’m quite sure the Chinese government doesn’t want to hurt the Internet industry or make it grow slower or kill it — I don’t think that’s the intention,” Cortesi said.
Second is Chinese automakers, which is still growing as demand is fundamentally there, Cortesi said.
Auto sales this year were depressed as some rushed to buy cars last year due to tax breaks, while others delayed big-ticket purchases because of the trade dispute with the US, she said.
Sentiment might normalize next year, as Beijing is likely to increase support for the industry, she said.
Third is South Korean cosmetics, which — because of tensions between China and South Korea — has seen fewer visits from Chinese tourists, but that is only temporary, Cortesi said.
“The fundamental demand from Chinese consumers and Chinese women to spend more money on cosmetics has not changed,” she said.
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