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Original title: Uncommon Consensus on Private Equity Inside and Out: China’s Uncomfortable Golden Age Has Just Begun Source: FUND tribe
Fang Peiyan, Reporter for China Fund News
This year is a difficult year for the economic situation. The new corona pneumonia epidemic is a global pandemic and the world economy has suffered a severe setback. In this context, the Chinese market has attracted the attention of domestic and foreign capital. Recently, at the Sixth West Lake Private Equity Global Funds Summit (2020), many foreign institutions pointed out that China’s economy is in a special period to overtake the United States. China has previously underestimated China, and A shares are still in an ultra-low allocation state. Private equity funds at home and abroad have rarely reached a consensus – the golden age of the A-share market is just beginning, and large holdings in China are the general trend.
Foreign institutions: China previously underestimated
Currently, A shares are still in ultra-low allocation
At the West Lake Summit, Rui Dalio, founder, co-chief investment officer, and co-chair of Bridgewater Investment, believes that China’s economic growth and development potential in the coming years is gradually outpacing the United States. He said that the current market is in a very special moment. First, China’s capital market is developing rapidly; second, the opening of the A-share market is aimed at foreign investors; third, the A-share market is relatively attractive; fourth is the global Investors have insufficient weight in the A-share market. In their view, these developments will lead to capital inflows, which will benefit all foreign and Chinese investors.
Subsequently, Wang Yan, general manager of Bridgewater (China) Investment Management Co., Ltd., added that as barriers, firewalls, and buffer periods have basically gone around the world, the world has become more flat and more vulnerable. Hazard warnings and hazards are spread across the world, and the speed at which they cause great damage is unmatched. As a global macro investor, Bridgewater believes that investing in China is a very good solution for dealing with risks and finding orderly, stable and reliable returns. He noted that China’s crisis management has performed very well in the epidemic. In his opinion, the whole world in 2020 is a crisis management model, which is better than who makes the least mistakes and who does better in the mechanism and effect of error correction. China can restore economic production and restore social order more quickly under the epidemic, and it is at the forefront of the world in terms of governance efficiency and people’s expertise. That is why they vote for China.
At the same time, Wang Yan bluntly said that in the current global asset allocation, the Chinese market allocation is obviously insufficient and the allocation is ultra low. As an investor in a global institution, if the Chinese market is included in all investment portfolios, due to the low correlation between the Chinese market and other objectives, two better results will occur: one is to reduce the risk of the entire investment portfolio and the other is Improve Risk Adjusted Return. Second, the scale of the Chinese market is large enough. If China can better protect property rights and foster innovation, innovation can further promote openness. This is a very good circle. Third, the resistance and strong will of the Chinese people are extremely competitive.
In his view, China is shaping the infrastructure network of the future, quietly leading and deploying artificial intelligence, cloud computing, cloud storage, large-scale algorithms,Big data、robot, 5G, mobile Internet, mobile consumption, etc. “If the investment is wrong at this point, we are willing to make the mistake until the end,” he said.
Wang Tiefei, president and founder of American Morrison Capital, firmly stated that China will have a magnificent bull market in the next five years. The core of this bull market is technological innovation, which includes electronic technology, electronic commerce, biotechnology, new energy and new consumption. At the same time, he believes that China’s wealth management industry will grow substantially in the next five years. He shared that Americans are now aware of a problem: They underestimated the potential of Chinese consumers. In fact, Chinese consumers continue to promote the development of Chinese society.
National private capital:
The golden age of investing in A shares has just begun
Tang Yiting, Chairman of Beijing Le Rui Assets, believes that in 2021, renminbi assets contain enormous opportunities and will become high ground for global return on investment. He believes that the real return on investment in each country comes from the wealth created by companies in that country. The competitiveness of Chinese companies has strengthened after the epidemic. After the epidemic, the share of China’s exports in the share of world exports has increased significantly. Second, after the epidemic, China was the first to control the epidemic and entered the recovery period first. He predicted that next year, China will enter this cycle of prosperity, and RMB stocks, commodities and assets will generate good returns. Third, China’s economy has become healthier after the supply-side reforms. China is the only economy in the world with room for conventional monetary policy, and the benchmark interest rate for returns to wealth has returned to normal. Insuperable.
Hu Jianping, founder of Shibei Investment, stressed that a number of companies have emerged in China that can continue to create value. “We have to get used to investing in A shares, and we have to get used to looking at our market with the mindset that we can live a good life for a long time.” He said the valuation of the Chinese stock market has not been recognized before by global investors. Recognize that the epidemic has allowed China to reassess. He bluntly said that China’s A-share market, the golden age of investment has just begun.
Hou Anyang, founder of Shenzhen Shangshan Ruo Water Assets, added that China’s engineering dividend is a great advantage. He believes there are some unstoppable forces behind China’s tech stocks that are moving forward. He said that making money is easy if you follow the trend of the times and the market.
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