(Yicai Global) July 4 -- Although Contemporary Amperex Technology has seen an almost 50 percent leap in its stock price since May, many international asset managers have reduced their holdings of the Chinese battery giant recently amid concerns that the stock might be artificially inflated, China Fund reported yesterday.

The Baillie Gifford China Fund, a tech-focused fund run by UK investment management firm Baillie Gifford, pared its stake in Ningde, southeastern Fujian province-based CATL by 6.9 percent in April.

Baillie Gifford has reduced its holdings in many Chinese stocks including CATL in the past year, as the Edinburgh-based company believes the stocks have grown too much, Sophie Earnshaw, fund manager of another of the firm’s funds, the China Growth Trust, said recently.

The Allianz China A-Shares fund, the largest overseas China equity fund run by German asset manager Allianz Global Investors, cut its holdings in CATL by 17.9 percent in May. CATL’s ranking in the fund has dropped to fifth from first. And the second largest fund run by US investment bank JPMorgan Chase, the JPMorgan Funds – China A-Share Opportunities Fund, reduced its stake in CATL in May by 11.2 percent.

CATL’s share price [SHE:300750] has had an impressive run in recent years. It closed flat at CNY522 (USD78) apiece today, a 47 percent jump in value since hitting a trough in May. And over a longer period the growth is even more astounding. Allianz China A-Shares, for example, bought in for the first time in October 2019 when the stock price was only CNY68.38.

Despite the sell-offs, foreign investors’ preference for Chinese assets is increasing, said Zhu Chaoping, JPMorgan Asset Management’s global market strategist. One reason is because life is getting back to normal now that the Covid-19 outbreaks are under control, which means corporate profits should improve. And another reason is that the country’s fiscal policies are very supportive at the moment.

Editor: Kim Taylor