Power Pacific Investment Mgmt. CIO Jun Li on China's Markets

The video discusses the impact of the Omicron variant on Shanghai, leading to lockdowns and affecting market sentiment. It explores the valuation of the equity market, highlighting sectors to consider or avoid. Regulatory concerns and potential actions by the PBOC are examined, along with expectations for market recovery and delisting risks for US-listed Chinese equities. A macro view on bonds and equities is provided, emphasizing the need for patience among long-term investors.

What is the current situation in Shanghai regarding the Omicron variant?

• The city is completely open with no restrictions.

• There are hundreds of cases, and some schools are in lockdown.

• The virus has been eradicated, and life is back to normal.

• Only a few cases have been reported, with no significant impact.

Which sectors are considered to have fair valuations despite the market downturn?

• Infrastructure and healthcare sectors

• Internet names and value stocks in Hong Kong and China

• Retail and travel sectors

• Technology and Internet sectors

What is the main reason for advising investors to avoid the technology sector?

• High growth potential

• Strong market performance

• Regulatory concerns

• Lack of innovation

What fiscal or monetary action is anticipated to support economic growth?

• Increase in interest rates

• Reduction in fiscal spending

• Cut in the reserve requirement ratio

• Increase in taxes

When is the equity market recovery expected to gain momentum?

• First quarter of the year

• Fourth quarter of the year

• Second quarter of the year

• Third quarter of the year

What is a major concern for US-listed Chinese equities?

• High valuation

• Lack of investor interest

• Delisting risks

• Strong regulatory support

What is the anticipated trend for interest rates in China?

• Interest rates are expected to decrease.

• Interest rates are expected to fluctuate unpredictably.

• Interest rates are expected to rise significantly.

• Interest rates are expected to remain stable.