MCHI - FLCH: The Lowest-Cost Play On China's Revival
2024-04-24 13:54:04 ET
Summary
- News flow has begun to turn positive for Chinese stocks.
- Policy support could gain further momentum from here.
- Franklin-managed FLCH continues to stand out as an ultra-low-cost China play.
The success of corporate governance reforms in Japan has sparked action among Chinese policymakers, as evidenced by last week’s “Nine-Point Guideline” announcement by the State Council. While not quite as clear-cut as Japan’s effort, the stated aim to incentivize more long-term capital is a clear step in the right direction; historically, similar reforms have also been rewarded with positive market performance. Note that this announcement comes on the heels of a reshuffle at the head of China’s Securities Regulatory Commission (CSRC), as well as a subsequent push for accelerated capital returns (cash dividends and buybacks) by listed companies. Combined, these events represent a positive signal of intent to address investors’ perceptions about the quality (or lack thereof) of the Chinese equity market....
FLCH: The Lowest-Cost Play On China's Revival