BNY’s Geoff Yu stresses that Chinese equities and Chinese Yuan (CNY) remain heavily under-owned versus APAC (Asia-Pacific) peers, with cross-border holdings at very low levels. While fundamentals are still not compelling, he argues that retail flows, a base in ownership and rising stimulus talk mean that any stabilization in data or credible policy support could trigger a meaningful rebuild in exposure to China.

China de-risked across asset classes

"CNY is also the worst-held APAC currency, yet flows are no longer showing aggressive selling."

"China has effectively been de-risked across equities, FX and fixed income."

"The fundamental case is not yet clean: data, earnings and policy follow-through still need to improve."

"But the positioning setup is becoming more compelling."

"If fundamentals stabilize or credible policy support emerges, even a modest rebuild in exposure to China could create a meaningful re-entry opportunity from very depressed ownership levels."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)