China reopening presents ‘great opportunity to buy’ Chinese stocks with valuation upside, Bank of America says

China is in the process of reopening and doing away with its tough Covid-19 restrictions, but there are “still a lot of doubts about the path towards reopening and about economic recovery next year,” Winnie Wu, co-head of China equity research at BofA Global Research, told the Post. “Our view is that it is a great opportunity to buy the dips in the next few months.”

The MSCI China Index, a gauge tracking about US$2 trillion worth of Chinese stocks listed at home and abroad, has jumped 37 per cent during the past five weeks, tempering this year’s decline. The index’s forward price-to-earnings ratio currently stands at only 10 times, Wu said, which is higher than the eight times seen during its recent low point in end-October, but is still below the normal level of 12 to 13 times.