Alibaba Becomes Key Holding in Chinese Fund Manager's Portfolio, Economic Measures Spark Interest in Leading Tech

Chinese fund manager Zhang Kun invested in Alibaba Group Holding BABA in the third quarter, making it the second-largest holding in his $8.5 billion portfolio, as leading tech and consumer stocks attract interest after years of underperformance.

Zhang, of Guangzhou-based E Fund Management, purchased 40.4 million Hong Kong-listed Alibaba shares via his E Fund Blue Chip Selected Mixed Fund, representing 9.1% of the fund’s assets, SCMP cites its quarterly report.

Zhang noted that certain consumer companies now offer dividend yields among the highest in the market, often surpassing dividend index constituents.

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This trend, alongside Alibaba’s 56% jump in Hong Kong during the third quarter, likely motivated Zhang’s move ahead of Alibaba’s second-quarter results on November 15 and the Singles Day shopping festival.

His flagship $6.2 billion Blue Chip fund gained 15.1% last quarter, outperforming a 12% benchmark rise.

The boost follows Beijing’s recent economic measures, including 800 billion yuan in stock support and eased property restrictions, which have driven strong stock performance.

People’s Bank of China upheld its key policy rate in October after prior cuts aimed at economic stimulus.

Last Friday, the central bank injected 700 billion yuan ($98.36 billion) into the banking system via a one-year medium-term lending facility, holding the rate steady at 2.0%.

The central bank also boosted liquidity with 292.6 billion yuan through a seven-day reverse repo at a fixed rate of 1.5%.

China’s current easing efforts began in late September, including slashing rates and lowering reserve requirements, adding 1 trillion yuan in available lending.

China’s commercial banks followed suit, cutting benchmark lending rates by 25 basis points to support the property sector.

The IMF recently revised China’s 2024 growth forecast to 4.8%, but UBS and Goldman Sachs expect growth to be near 5% in light of these economic boosts.

Price Action: BABA stock is up 3.09% at $100.43 at the last check on Monday.

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