Chairman of Chinese investment vehicle abrn blames ‘zero-Covid-19’ policy for collapsing yields


Wednesday 06 July 2022 10.05 a.m.

(Photo by Getty Images)

The chairman of China’s investment vehicle abrn pinned the slump in yields on Beijing’s controversial ‘zero-Covid-19’ stance and geopolitical woes.

While the country is still seen as having significant long-term growth prospects, returns on assets in the country fell 23% in the six months to April 30, reversing nearly 19% growth in returns. during the year until October. 2021.

The value of Chinese assets has also declined in recent months, falling by £77.3m since October 31, despite abrn’s investments in some of the country’s biggest companies.

Chairman Mark Hadsley-Chaplin noted that regulatory upheaval, as well as real estate and energy issues, have also weighed on markets, hurting potential returns from abrdn’s investments, which include tech giant Tencent, JD.com , e-commerce giant Alibaba and online service platform Meituan. .

But the potential delisting of Chinese companies listed in the United States due to audit requirements has further dampened activity, as a geopolitical storm continues to brew between China, the United States, the United Kingdom Kingdom and Russia.

In a joint statement today, Hong Kong investment managers Nicholas Yeo and Elizabeth Kwik added: “Investors have been shaken on many fronts, both domestically and internationally. A spike in Covid-19 cases in December, although representing a relatively small number of reported infections compared to outbreaks in Western societies, saw lockdowns imposed first in Xi’an, followed by major cities in Shanghai. and Shenzhen, as the Chinese government sticks to its “zero-Covid-19” policy.

“Lockdowns since March have disrupted industrial production and dashed hopes of reopening China, which has heightened investor caution. Ongoing anxiety over the regulatory crackdown has added to negative market sentiment, as have concerns that the United States could delist Chinese companies listed in New York if they fail to provide audit documents. .

As a result, the Shanghai composites and Shenzhen components markets both hit 21-month lows in mid-March, before “recovering ground on the government’s supportive policy rhetoric”, they said. , giving some hope to investors in the country.

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