While trade war remains a sticky topic for the Sino-US relation, on both sides of the Pacific their respective stock markets are on a bull run.
On Wall Street, animal spirits are riding high. Generous valuations are heaped on AI, crypto and a wide swathe of stocks. Key US equity indices are near record highs. In China, while prices are not yet that ebullient, investor sentiment is too on the mend.
Tencent (US:TCEHY; HK:700), the ubiquitous Chinese social-financial app, has recovered most of the ground lost during the 2021-2023 bear market. The $715 billion company, 15th largest in the world, is pivoting to AI.
Another Chinese behemoth, Alibaba (US:BABA), is also catching up with the AI wave. Its newly-launched AI app, Qwen, is one of the fastest growing app these days. Its share prices are up by more than 150 percent from its 2022 lows.
So is it time to buy into Chinese stocks?
For UK-based investors, the Fidelity Chinese Speciality Fund (UK:FCSS) appears to be a good choice.
As stated on its factsheet, the fund owns a range of big Chinese stocks. The top 3 stocks in FCSS’s portfolio are: Tencent, Alibaba and PDD. PDD is a competitive net-supermarket in China. [1]
Trendwise, the fund is also sitting on a nice base support trendline. This floor (300p) may lend support to another up-wave in the coming quarters.
Since country-specific funds move slowly, one should aim to hold the security over the medium-to-long term. Watch to spread entry points on pullbacks.
