China stock investors, already disillusioned by Beijing's lower-than-expected economic growth target for the year, will be further disheartened by the shock collapse of U.S. lender SVB Financial Group, market participants said.
Although the event will unlikely trigger another financial crisis, it could have a negative psychological impact on China markets, he said.said on Saturday that it has a sound corporate structure and an independently operated balance sheet, in an apparent effort to pacify local clients.
Lower risk appetite could mute any excitement from an expansion of the China-Hong Kong Stock Connect on Monday. More than 1,000 China-listed A-shares, and nearly 200 Hong Kong-traded stocks will be added to the cross-border investment scheme.Li Bei, fund manager at Shanghai-based hedge fund house Banxia, said she has slashed stock holdings, and will "maintain a relatively low exposure", citing a lack of good opportunities.
Derek Lin, a portfolio manager with Boston-based Columbia Threadneedle Investment, said the government "does need a good year" but isn't rushing to launch big stimulus, so "the market is trying to get excited, but there is some hesitancy." Still, domestic A-shares will likely outperform offshore China stocks, which are more vulnerable to potential spillover from the SVB collapse, analysts say.
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