Bill Maldonado, who oversees about $80 billion as the chief investment officer in Asia-Pacific for the money manager, picked Greater China among the top-three opportunities in the world for 2013 and said he particularly favoured Chinese financial, consumer cyclical, materials and energy sector stocks.
Southeast Asian markets such as the Philippines and Indonesia, investor favourites since the financial crisis, are starting to look over-priced, Maldonado, who is underweight the region, told the Reuters Global Investment 2013 Outlook Summit on Thursday.
The Hong Kong-based executive, who left an academic career in laser physics for the financial industry nearly 20 years ago, said investors have realised that China will avoid a hard landing and they could get a 20 percent return in China from current valuation levels.
"I'd say that's very typical of markets at turning points," Maldonado said.
The Shanghai Composite Index fell below the 2,000-point level this week for the first time since January 2009 and has dropped about 10 percent so far in 2012.
HSBC was early with its bet on a China rebound and has suffered as a result, with the HSBC Asia ex Japan Equity fund returning 10.3 percent through September this year, underperforming a 16 percent jump in its benchmark index.