Session recording and slides

Kevin Russell: China long-short equity: alpha and liquidity outpacing investor allocations

China long-short equity: alpha and liquidity outpacing investor allocations

China’s economy is approaching almost 17% of global GDP but investors remain hesitant to allocate capital to China despite an evolving regulatory approach and improving market structure dynamics. Do conventional investment processes and risk management apply to the Chinese market, and how sustainable is this market environment?

Speaker:
Kevin Russell, chief investment officer, UBS Asset Management
Moderator: Laurence Parker-Brown, institutional content producer, Conexus Financial

VIEW KEVIN’S PRESENTATION SLIDES HERE

Key Takeaways

  • China has experienced the sharpest decline in GDP of the world’s major economies during the pandemic but also the fastest and most pronounced recovery.
  • Proactive monetary policy and spending towards data centres, electric vehicles and 5G mean that China is building the infrastructure for the fourth industrial revolution.
  • Investing in Chinese equities involves considerable scope for alpha generation as some 82 per cent of the value of trading is currently performed by retail accounts.

Poll results

Of the Global Fortune 500 Companies, the US has 121. How many does China have?
(A: D – 125)
  • 50
  • 75
  • 100
  • 125

In the China A share market, how many (in millions) local retail traders are there?

(A: D – 150)

  • 50
  • 75
  • 100
  • 150

The global ratio of stock market valuation to GDP is 90%. In China it is?

(A: D – 60%)

  • 125%
  • 100%
  • 80%
  • 60%