Toronto, Canada, Jan. 12, 2023 (GLOBE NEWSWIRE) -- Financial analysts at Toronto Daegu Assets have increased exposure on Chinese assets as the rapid removal of Covid Zero policies improves prospects for the nation's economic growth.
The country began to relax its strict pandemic regulations last month, firstly doing away with mandatory testing and lockdowns before announcing that it will abolish quarantine requirements for overseas visitors.
"Following a year of strict Covid restrictions that depressed the nation's markets, China is now fully focused on growing its economy. With the end to its lockdowns and other severe steps, we are recommending our investors to expect a huge advancement in China's investment outlook. Our analysts also predict that the country's GDP will rebound in the second quarter of 2023," said Daniel Williams, Senior Vice President of Institutional Markets at Toronto Daegu Assets.
According to Toronto Daegu Assets data, the MSCI China index climbed 2.4% on Tuesday to stand 50% above its low on October 31. Hong Kong's Hang Seng index has gained 38% over the same period.
The company anticipates that Chinese stocks will top global performance rankings in 2023. It also expects the yuan to advance to 6.65 per dollar by year-end, which amounts to a 1.8% increase from current levels.
"We believe China's unexpectedly swift removal of COVID restrictions will open the door for a quicker economic reopening and a rebound in investor sentiment towards China stocks. We are advising our investors to anticipate the yuan's strength to be front-loaded in the first half of this year before moderating in the second half after a recovery in international travel," said Edward Thompson, Director of Capital Markets at Toronto Daegu Assets.
China’s government hopes that by ending its Covid lockdowns, it will provide a much-desired boost to the country’s economy and employment.
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