Latest news with #ChetanSeth
Mint
13-05-2025
- Business
- Mint
US-China trade deal: Nomura turns bullish on Chinese stocks after truce on Trump's tariffs
Nomura Holdings Inc. strategists upgraded Chinese stocks to a 'tactical overweight,' saying the trade truce between the US and China is a significant positive for the Asian nation's equities. 'These developments should reduce the US-China geopolitical risk premium that has been associated with China stocks,' strategists led by Chetan Seth wrote in a note Tuesday. Valuations remain attractive and there's scope for some global investors to return, they added. The change in Nomura's stance from neutral follows the better-than-expected de-escalation of trade tensions between the US and China after discussions over the weekend. The US on Monday said it would reduce levies on most Chinese imports to 30% for 90 days, while China's duties on US goods will drop to 10%. President Donald Trump also said Asia's largest economy has agreed to remove non-tariff barriers on imports. The deal removes an overhang and analysts are becoming increasingly optimistic that the trade truce will help drive more inflows into Chinese shares. Local markets had been on a positive path leading up to the talks over the weekend, with shares getting an earlier boost from an interest rate cut last week and policymakers' pledge to support efforts by the so-called 'stock stabilization fund.' The Chinese onshore benchmark pared gains of as much as 0.6% to trade little changed, as the reduction in tariffs lowered investors' expectations for any large stimulus from China. A gauge of Chinese shares listed in Hong Kong retraced some of the advances made on Monday, falling 1.8%. Meanwhile, the yuan climbed to a six-month high in both the onshore and offshore markets on Tuesday after the People's Bank of China set the currency fixing stronger than the 7.2 per dollar level. Nomura trimmed its overweight stance on India to fund the China upgrade. It is the first major upgrade of China allocation by strategists since the world's two largest economies agreed to a temporary reprieve in their trade war. 'Having both India and China equities as an overweight will offer Asian equity investors a natural hedge in portfolios against any trade-related volatility,' the strategists wrote. While markets have been expecting some reduction in tariffs, the outcome is much larger than expected and can bring a major relief for stocks globally. Less than 10% of respondents in a recent survey by Nomura anticipated tariffs falling below 34%. A reduction in the US-China geopolitical risk premium paves the way for the MSCI China Index to trade as high as 13 times one-year forward earnings, they wrote. The gauge is currently trading at 10.9 times on that metric, according to data compiled by Bloomberg. --With assistance from Karl Lester M. Yap. (Updates with details throughout.) More stories like this are available on
South China Morning Post
13-05-2025
- Business
- South China Morning Post
Nomura upgrades China stocks to ‘tactical overweight' after tentative trade breakthrough
Advertisement In a research note on Tuesday, Chetan Seth, a strategist at the Japanese firm, upgraded Chinese stocks to a 'tactical overweight' rating from 'neutral.' 'While there are still some uncertainties on the medium-term US-China outlook, we think these developments should reduce the US-China geopolitical risk premium that has been associated with China stocks,' the report said. 'Recent concerns about potentially more hawkish actions from the US aimed at delisting of Chinese ADRs should also dissipate.' According to a recent Nomura survey, fewer than 10 per cent of respondents expected the tariff rates to drop below 34 per cent on both sides. In a 90-day reprieve, China reduced its levies on US imports to 10 per cent, while the US cut its tariffs to 30 per cent, according to a joint statement from the two countries. 'The US-China agreement on Monday where tariffs were reduced came as a significant surprise for markets,' the report said. 'This reduction is much larger than expected and will bring a major relief for global stocks.' Advertisement In the wake of the trade deal's announcement, Morgan Stanley and JPMorgan Asset Management also struck a positive tone on Chinese equities. Morgan Stanley hailed the ceasefire as a catalyst that would attract inflows and ease concerns about earnings shocks, while JPMorgan said the news would allow for a more risk-oriented attitude.
Bloomberg
13-05-2025
- Business
- Bloomberg
Nomura Turns Bullish on China's Stocks After Trade Truce With US
Nomura Holdings Inc. strategists upgraded Chinese stocks to a 'tactical overweight,' saying the trade truce between the US and China is a significant positive for the Asian nation's equities. The agreement to temporarily lower tariffs 'came as a significant surprise for markets, and will likely support risk positivity in the near term,' strategists led by Chetan Seth wrote in a note Tuesday. That would extend a relief rally seen in Chinese stocks in the past month, they added.
Bloomberg
27-02-2025
- Business
- Bloomberg
Nomura Cuts Taiwanese Stocks on AI Sector Scrutiny, Tariffs
Nomura Holdings Inc. downgraded Taiwanese equities citing greater scrutiny of the artificial intelligence sector and US President Donald Trump's plans to impose tariffs on trading partners. The island's stocks were cut to neutral from a tactical overweight in Nomura's Asian allocation given 'concerns about tariffs, chip sector restrictions, greater AI thematic scrutiny, and elevated valuations and investor positioning,' strategists including Chetan Seth wrote in a note dated Feb. 26.
