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Bloomberg
Bubbling tensions between the world’s top two economies over tariffs pose no bar to diving into Chinese stocks, unless a full-blown trade conflict breaks out, according to Deutsche Bank AG.
The US is on course to release its final list targeting $50 billion of Chinese imports with tariffs by June 15, with the levies taking effect soon after. And China’s government said the tariffs could scuttle progress made so far in talks. Next steps are unclear, following Commerce Secretary Wilbur Ross weekend meetings with negotiators in Beijing. The rhetoric isn’t troubling Deutsche Bank strategist Will Stephens. The MSCI China Index is one of the most domestically geared gauges globally, with revenue exposure to the US just 2 percent — meaning stocks in the benchmark shouldn’t bear the brunt of trade tensions, according to Deutsche Bank.
“We’ve been relatively sanguine about it,†he said in a telephone interview, adding that the volatility would provide entry opportunities to buy stocks in Asia. That view hasn’t changed after statements from the Chinese government during the weekend, he said on Monday.