As excitement over DeepSeek has eased, JPMorgan warned its clients, “Please be careful: US-China will focus and take back the risk.” A February 24 memo warned that the White House’s new US first investment policy could trigger Chinese stock withdrawals after a recent rally. In fact, on Thursday, President Donald Trump said a 10% tariff on Chinese goods would arrive on March 4th. He said 25% of Canada and Mexico’s missions will also be carried out that day. Stocks in Hong Kong and mainland China fell on the news on Friday. Stock recommendations for the jpmorgan name are included in three Chinese real estate companies. The US listed KE Holdings and Chinese resource lands and Chinese overseas lands and investments (known as CR lands and E. coli, respectively) are both traded in Hong Kong. Investment companies have overweight in all three stocks. Ke Holdings operates a major Chinese brokerage of apartment rental and home sales. CR Land and Coli are two state-owned companies that develop and manage residential and commercial real estate in China. “We expect defense and value to be better than growth in the coming weeks, and A-share could be better than offshore-listed China/HK Equity Index. Hong Kong’s Hangsen index fell 2.3% in a week after hitting a three-year high on Thursday. Shanghai’s major CSI 300 index and shares registered in Shenzhen fell 2.2% that week. “We believe China is the true focus of the Trump administration, and we assume that a significant deterioration in tension between the two biggest economies of the world may be inevitable,” Nomura’s economic prime minister Ting Lu said in a Beijing memo on Thursday afternoon. “The market seems to ignore these risks right now, but it could be on the forefront in the coming months,” he said. The new US First Investment Policy has also attracted the attention of analysts who have returned to China’s allegedly military-affiliated Chinese companies, and has recently focused on an audit dispute that threatened to abolish US Chinese stocks, which had the issue temporarily settled in the second half of 2022. [China] delivering forceful macro policy stimulus, boosting private sector confidence, and aiding high-quality and tech (AI) development,” Goldman Sachs analysts said in a Feb. 25 note. In a separate report the following day, the analysts detailed several stock baskets, including one for Asia Pacific ex-Japan domestic consumption that could benefit from additional support due out at China’s so-called Two Sessions that kicks off in the week ahead. The top three Chinese With a basket weight of 10% each, Chinese e-commerce giant Alibaba and its rival PDD Holding run apps for food delivery, discover nearby attractions and win Goldman’s baskets. Coincidentally, an analysis from HSBC shows that US investors have the largest positions in Alibaba, Tencent and Matean, but most positions are via US mutual funds and do not focus on the White House’s latest policy on investments through government pensions and donation funds. Despite US tensions looming, China’s economic outlook is , will be the forefront and center of this week’s week. On Wednesday, China is expected to officially raise its deficit and detailed stimulus plans, but acknowledges domestic demand weaker with its softest inflation outlook in over 20 years. The move will halt the real estate sector’s decline, following a high-level directive in September. Macquarie’s chief China economist Larry Foo shared three positive signals from the housing market on Friday, bringing hope to bottom this year. He pointed out that housing inventory is expected to return to normal levels by the end of the year, but policymakers are keen to stop the decline and appear willing to bail out key developer Vanke. Additionally, Hu said rental yields are beginning to surpass China’s 10-year government bond yields, making housing more attractive compared to other long-term assets. Foreign capital is beginning to act on new Chinese real estate investment opportunities, particularly given the promotion of Beijing policy to increase rental housing. Last week, Investco announced that its real estate investment division has established a joint venture with Ziroom, a Chinese company known locally for its standardized, modern style apartment rentals. Part of this opportunity comes from traditional developers currently unable to participate financially, Calvin Chou, APAC head at Invesco Real Estate, said in an interview. “I think there’s a good runway here.” The joint venture, called Izara Holdings, is planning to invest 1.2 billion yuan (approximately $160 million) in the 1,500-room rental housing development near one of Beijing’s Winter Olympic sites. Yue added in a statement that the joint venture will take advantage of not only a new phase in the Chinese real estate market, but ultimately a new phase in the overseas market. Ziroom is private. This is a client of KE Holdings, and in its annual report revealed that it sold its online marketing and agency services to Ziroom. – CNBC’s Michael Bloom contributed to this report.
