(Bloomberg) -- Chinese stocks can extend this year's winning run even in the absence of a trade deal between the world's biggest economies, due to the huge toolkit available to policymakers, according to Aberdeen Standard Investments' head of equities.
“We're still pretty positive about the China A-share market in particular,” Devan Kaloo, whose firm manages about $643 billion, told Bloomberg TV in Sydney. “China has the ability to policy respond to the world's troubles and as a consequence of that we're expecting improved liquidity, increased stimulus and that's actually supporting the market. So we think it could still go higher from here.”
Investors are grappling with the impact of the trade dispute that's showing signs of weighing on an already fragile global economy. While Kaloo doesn't expect Presidents Donald Trump and Xi Jinping to resolve the spat anytime soon, credit growth within China is showing signs of rebounding amid policy efforts to get money flowing around the slowing economy.
“The ability to be able to get a deal struck -- and one that sticks -- is nigh on impossible,” he said in separate comments in Sydney on Friday. “So I don't think the U.S.-China trade thing is likely to be successfully resolved, certainly there will be no large deal achieved.”
Kaloo, who has spent almost 20 years at Aberdeen and has been in charge of global equities since 2015, expects details on stimulus plans to be announced at the Fourth Party Plenum next month.
“I suspect on the back of that they are going to be announcing some pretty big stimuli,” he said.
--With assistance from Andy Clarke and Anna Luk.
To contact the reporters on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net;Paul Allen in Sydney at pallen32@bloomberg.net
To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Joanna Ossinger, Cormac Mullen
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