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Chinese stocks ‘near all-time low’, says China Renaissance CEO

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CNN Business

One of the main Chinese investments Bankers say the country’s stock markets appear to be bottoming out.

Chinese markets have been beaten in recent months by the impact of Beijing zero covid policya housing crisis, aggressive regulation and nervousness over the country’s close ties with Russia.

So far this year, the benchmark Shanghai Composite

(SHCOMP)
the index fell 15%, while the Shenzhen Composite is down nearly 24%. On Monday, Chinese stock markets opened higher but struggled to sustain those gains after authorities reported gloomy economic data for the month of April.

I think the market is about to hit bottom now, said Fan Bao, CEO of China Renaissance, an investment bank and private equity firm, in an interview with CNN Business in Hong Kong on Friday. referring to Chinese stocks. I must say, [overall investor] the feeling is pretty bad.

Bao said he believed China was not facing a crisis, but rather that the debate had become too negative lately as global asset managers fret about investment opportunities in the second Mondial economy.

We actually saw it as a great investment opportunity, said Bao, sitting in front of a sign in his office that read: BullMarket4ever.

He added that his Beijing-based company, which invests in startups through several funds, had recently been able to secure deals at valuations that were half of what they were before.

I don’t think people need to panic.

Bao is motivated enough to remain optimistic he is a current and former advisor to the Shanghai and Shenzhen stock exchanges, respectively.

His firm, which manages about $7.7 billion in assets, also relies heavily on the performance of Chinese tech firms, which have come under intense pressure over the past 18 months as regulators aimed to some of the biggest names in the industry.

China Renaissances treasury shares are down about 40% year-to-date in Hong Kong.

Bao is known as a veteran negotiator in China, where he helped broker the 2015 merger between Meituan and Dianping, two of the nation’s leading food delivery services. Today, the combined company’s super application platform is omnipresent in China.

He and his team have also invested in US-listed Chinese electric vehicle maker Nio.

(NIO)
and Li Auto (LI), and helped Chinese internet giants Baidu

(TO START UP)
and JD.com

(JD)
complete their secondary listings in Hong Kong.

Investor concerns have been piling up recently over China, which is grappling with deep economic shocks as it continues to endure strict Covid-19 lockdowns, including an extended one in the financial center from Shanghai.

At least 32 the cities of China are in total or partial containment, which could impact up to 187 million people across the country, according to CNN calculations.

The restrictions have disrupted virtually every aspect of business, leading to widespread supply chain shocks and an exodus of expatriates.

The problem has also exacerbated the fall in Chinese stock markets, putting it among the worst performers this year, behind Russia, the Nasdaq and S&P500.

Private Chinese companies, especially in tech, had already been through turmoil due to a historic regulatory crackdown that crushed alibaba share price

(BABA)
Tencent

(TCEHY)
and other titans.

Last July, Goldman Sachs

(GS)
analysts said some of his clients had questioned whether Chinese markets had become uninvestable, citing regulatory pressure.

Chinese officials signaled some relief last month, pledging to support and promote the healthy development of the internet industry. But investors remain cautious.

Soft Bank

(SFTBF)
one of the world’s biggest technology investors, said on Thursday it was pursuing a cautious approach to investing in the country.

Despite its optimism, China Renaissance has also slowed its pace of new investment this year, according to Bao.

But he ignored major concerns, comparing current market conditions to other past downturns.

From time to time you would see this discussion on: Should we reduce exposure to China and even [exit] China, he said, pointing Asian financial crisis in 1997 and the break-up of the internet bubble In 2000.

Bao said that although he felt it was very difficult to stay calm these days, he tried to keep his head down and stay focused on the big picture.

For long-term investors, who have been through several cycles, usually in principle, it’s a good window to invest when people are feeling really down, he said.

CNN’s Beijing bureau contributed to this report.

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