Franklin Templeton CEO says China pessimism is overhyped

By Yantoultra Ngui

SINGAPORE (Reuters) – The idea that investment opportunities in China have met their demise is probably overhyped, said Jenny Johnson, president and chief executive officer at global investment management firm Franklin Templeton.

“There is a lot of pessimism built into the pricing,” she said at a session at the Forbes Global CEO Conference in Singapore.

“You are talking about the second-largest economy,” she said. “You are talking about an economy that generates more engineers than any other any country in the world every year, and so from innovation I think there is going to be opportunities.”

Johnson, who led Franklin Templeton’s acquisition of Legg Mason (NYSE:) in 2020, resulting in a combined organization that now has $1.5 trillion in assets, sees desire in China to have more independence in energy and food security.

“You’re probably not going to time it exactly right, it could bump a lot of for a while, but when it gets right it is going to be a rubber band back up,” she said.

Johnson’s comments came as global investors have reduced their appetite for China, discouraged by the country’s faltering economic recovery and tensions with the West.

U.S. Commerce Secretary Gina Raimondo noted during her China visit in August that U.S. companies have complained that the country has become uninvestable, pointing to fines, raids and other actions that have made doing business in China risky.

Meanwhile, Johnson also sees opportunities in secondary private equities and private credit globally.

“I think it’s underappreciated as investment opportunity,” she said. “You have of LPs out there who are overcommitted and have capital calls and they have to sell at discount.”

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