Trump 2.0 Impact: CLSA Reverses On China To Go Overweight On India
CLSA returns to a benchmark on China and 20% overweight on India, anticipating the return of a Trump trade war against Beijing.
CLSA Ltd. has done an about-turn of sorts, shifting its “tactical allocation” to India from China in the aftermath of Donald Trump’s win in 2024 US elections.
“The initial reaction was to rent rather than buy the rally, yet we committed funds at the start of October by tactically deploying some of our over exposure on India to China,” CLSA analysts Alexander Redman and Wei Sheng Wan We said in a note titled ‘Pouncing Tiger, Prevaricating Dragon’ on 14 November 2024. “We now reverse that trade.”
“Misfortune can happen in threes,” CLSA said.
Trump 2.0 heralds a trade war escalation just as exports buoy China’s growth.
The China stimulus amounts to de-risking with little inflationary benefit.
Higher US bond yields sap scope for US Fed and thus PBOC to ease rates.
“These concerns lead to a buyers’ strike by offshore investors who built China exposure after the PBOC stimulus in September,” the report stated.
This is a developing story.
