Billionaire hedge fund manager David Tepper to buy ‘everything’ China-related

Investing.com — Billionaire investor David Tepper said he is buying more of “everything” related to China after Beijing introduced unexpectedly aggressive stimulus measures to prop up the country’s slowing economy.

Tepper, who founded Appaloosa Management in 1993, explained that his decision stems from the policy shift made by Chinese leaders.

“I thought that what the Fed did last week would lead to China easing, and I didn’t know that they were going to bring out the big guns like they did,” he said in a CNBC interview on Thursday.

Tepper’s hedge fund maintained most of its positions in Chinese companies during the second quarter, even as it trimmed stakes in Alibaba (NYSE:BABA) Group and several U.S. tech giants. With China now pledging more fiscal support and moves to stabilize the property market, Tepper is once again increasing his exposure to Chinese stocks, including tech firms like Alibaba and Baidu Inc (NASDAQ:BIDU).

“We got a little bit longer, more Chinese stocks,” Tepper said, citing the attractive low valuations as a reason for his increased investments, even after the recent surge in prices.

The comments come as China’s onshore equity benchmark, the Shanghai Shenzhen CSI 300, jumped 14% this week, marking its largest weekly gain since the global financial crisis. Meanwhile, the NASDAQ Golden Dragon China, which tracks U.S.-listed Chinese stocks, rallied 19% over the same period.

Before this week’s rally, Tepper, alongside Scion Asset Management’s Michael Burry, had been one of the few notable hedge fund investors bullish on Chinese stocks.

Tepper also mentioned that he has relaxed some of his self-imposed limits on Chinese stock investments.

“I have limits, historic limits. I probably said a long time ago, I don’t go above 10% or 15%. Well, that’s probably not true anymore,” he told CNBC, though he added he’d likely set a “new found limit” in case of a market pullback.

Tepper isn’t alone in his bullish stance on China. Nick Wilcox of Man Group Plc told Bloomberg earlier this week that he expects Chinese stocks to continue their rally, buoyed by ongoing policy support, improved earnings, and the Federal Reserve’s recent easing, which has opened more room for China to cut interest rates.

Similarly, Goldman Sachs’ prime brokerage reported hedge funds buying Chinese equities on Tuesday.

Meanwhile, Morgan Stanley strategists predict the CSI 300 Index could rise another 10% in the near future.