Lombard Odier Keeps China Overweight, Eyes AI
SingTao · 1 SOURCESabout 1 hour ago5 MIN
Summary
Lombard Odier has released its latest Asia investment strategy, forecasting one US Federal Reserve rate hike in September followed by a prolonged pause. The firm said that move would be an adjustment to monetary pressures rather than a change to its economic growth outlook, and it expects the drag from higher rates to fade gradually next year. It is maintaining an overweight stance on both developed and emerging market equities, with China remaining a preferred market within emerging Asia and Latin America. Within China, the firm sees opportunities in “New China” sectors including artificial intelligence, robotics and new energy
Key Points
- John Woods, Lombard Odier’s Chief Investment Officer for Asia, said a September US rate increase should be a short-lived pressure rather than a threat to growth
- The firm is overweight developed and emerging market equities, favouring Japan and small caps in developed markets while staying neutral on US mid- and large-cap stocks
- In emerging markets, Lombard Odier is overweight China, South Korea, Taiwan and Brazil, identifying China’s “New China” industries as the main opportunity set
- Discretionary portfolio head Siu Chi-ming (邵志銘) said the firm remains overweight Chinese technology because official support for the new economy exceeds support for the old economy
- Senior macro strategist Homin Lee expects China to step up fiscal stimulus in the rest of the year, potentially using more existing bond issuance quotas
Why It Matters
For Hong Kong investors, the call reinforces a market case for staying exposed to China-related growth sectors even as US rates may rise once more. The firm’s positive view on quality Hong Kong initial public offerings and ample mainland savings also points to continued support for the city’s fundraising market if strong listings keep coming