Tepper Increases Investment in China

Billionaire investor David Tepper announced that he is buying more of “everything” related to China following aggressive stimulus measures from Beijing aimed at supporting the slowing economy.

Tepper, founder of Appaloosa Management, indicated that his decision was influenced by the Chinese leaders’ policy shift and that he anticipated an easing from China following the Federal Reserve’s actions. He said in a CNBC interview, “I didn’t know they were going to bring out the big guns like they did.”

During the second quarter, Tepper’s hedge fund maintained most positions in Chinese firms while reducing stakes in Alibaba Group and several U.S. tech companies. In light of China’s recent fiscal support and stabilization efforts in the property market, Tepper is increasing his investment in Chinese stocks, including tech companies such as Alibaba and Baidu Inc.

“We got a little bit longer, more Chinese stocks,” he noted, pointing to attractive low valuations as a reason for his increased investments, despite recent price surges.

His comments come as the Shanghai Shenzhen CSI 300, China’s equity benchmark, surged 14% this week, its largest weekly gain since the global financial crisis. The NASDAQ Golden Dragon China, tracking U.S.-listed Chinese stocks, rose by 19% during the same period.

Before this rally, Tepper was among the few hedge fund managers bullish on Chinese stocks, alongside Scion Asset Management’s Michael Burry. Tepper also revealed that he has relaxed his self-imposed investment limits on Chinese stocks, adjusting his previous thresholds of 10% or 15%. He mentioned he would establish a “new found limit” in case of market pullbacks.

Others share Tepper’s optimism; Nick Wilcox of Man Group Plc expects continued rallies in Chinese stocks due to persistent policy support and improved earnings. Goldman Sachs’ prime brokerage confirmed that hedge funds have been purchasing Chinese equities, as Morgan Stanley strategists anticipate a potential 10% rise in the CSI 300 Index soon.