"Biggs Says China Stocks Are World’s Best, Treasuries a ‘Buy’
May 29 (Bloomberg) -- Chinese stocks are the most attractive worldwide as the global economy recovers, while U.S. 10-year Treasury notes are a “buy” because inflation will remain subdued, investor Barton Biggs said.
“I don’t believe the bear stories about Chinese growth,” Biggs, the former chief global strategist for Morgan Stanley who now runs New York-based hedge fund Traxis Partners LP, said in an interview on Bloomberg Television. “Global economies have stabilized and are beginning to rise again.”
Biggs said Chinese shares trading in Hong Kong may advance as the world’s third-largest economy grows as much as 7 percent annually during the next five years. His bullish outlook on Chinese growth contrasts with warnings from brokerages including Credit Suisse Group AG that the nation’s recovery is stalling. The MSCI China Index has surged 30 percent this year, compared with an 8.4 percent gain in the MSCI All-Country World Index.
Biggs said he sees a “buying opportunity” in 10-year Treasury notes after they slumped on concern that inflation will increase and record U.S. debt sales will overwhelm demand. Ten-year notes slid this month, pushing yields up about 35 basis points to 3.46 percent, according to BGCantor Market Data.
“We’re a long way away from any serious revival in inflation,” Biggs said.
U.S. stocks may extend their three-month rally, with the Standard & Poor’s 500 Index rising to 1,050, a 14 percent gain from today’s closing level, Biggs said.