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<Research>JPM: Risk-off Rotation Begins; Investors Suggested to Shift to Quality Laggards
Recommend 36 Positive 57 Negative 26 |
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The resurgent US-China tensions since last Thursday (9th) are increasing geopolitical risk premium, JPMorgan released a research report saying. The broker had previously warned of the following risks, naming high thresholds for US-China trade negotiations in November, downside pressure on EPS estimates for the CSI 300 Index during the 3Q25 results and that the stabilization of the US 10-year treasury yield will limit the easing space for equity risk premium. Ahead of likely weeks of de-risking, JPMorgan upgraded the consumer staples sector to Overweight, and downgraded the discretionary/ healthcare sector to Equalweight. The broker recommended shifting from crowded growth stocks to less crowded quality laggards: HAIER SMARTHOME (06690.HK), MIDEA GP (000333.SZ), MENGNIU DAIRY (02319.HK), YILI (600887.SH) and TINGYI (00322.HK) in the consumer sector; PETROCHINA (00857.HK) in the energy sector; CCB (00939.HK)(601939.SH) in the financial sector; CHINA MOBILE (00941.HK), CHINA TELECOM (00728.HK) and CHINA UNICOM (00762.HK) in the communications sector; and YANGTZE POWER (600900.SH) in the utilities sector. As the risk-off deepens further, JPMorgan believed that there will be opportunities to raise exposure to China and rotate back to growth stocks. Key forward-looking events include the Fourth Plenary Session (20-23 October), APEC meeting in South Korea (29-30 October), the US-China tariff extension deadline (10 November), and the 3Q25 results over October-November. AASTOCKS Financial News Website: www.aastocks.com |
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