The reopening of China is seen as a major tailwind for the stock market this year, and Bernstein has shared a list of stock picks for cash – which also offer downside protection. “We worked with our sector analysts to highlight 30 stocks that look well positioned to capture China’s reopening tailwind, benefiting from risk sentiment while not losing the risk of a global recession,” Bernstein analysts, led by Jay Huang, wrote in a note on the 20 February Bank said it favors “laggards” – beaten down stocks from last year – as providing “the best light” this quarter in Asia. But it also asks investors to have some “defensive exposure” by holding high-yielding stocks to protect against losses if the market becomes riskier. “The fact that the high-yielding names have generated significant alpha over the long term in Asia and that the portfolio has never been very cheap outside of the tech bubble gives us the comfort to hold even if the market remains more bullish,” the bank added. . Increase in tech stocks One sector that Bernstein likes is technology. “We believe it is time to increase exposure to technology as it is the sector that has been beaten the most in the region (even after the rally), it has experienced the worst decline since 2011, sentiment towards the sector remains depressed. earnings are falling and valuations are looking more makes sense (the sector is trading below the 5-year average),” the bank said. Alibaba is one of the stocks that make up Bernstein’s screen. The bank believes Alibaba will gain market share as China reopens and says it is attracted by its “potential runway of event catalysts,” which includes the potential listing of Ant Group, which it owns 33% of. Alibaba shares also appear to be “well-valued” across multiple metrics, and the risk-reward remains constructive, the bank added. Bernstein also likes Tencent, with the bank expecting Tencent to be a “co-winner” in advertising in the “next few years.” “We think Tencent’s revenue growth could reach a low-teens percentage this year, and we expect a combination of improved segment mix and limited operating expense growth to mean revenue could grow by 25% in 2023,” the bank said. Other internet stocks that made Bernstein’s screen include Pinduoduo and JD.com. “We continue to like Pinduoduo the best in our e-commerce coverage. Alibaba should benefit from the reopening, but the market share trends of Pinduoduo and JD should look stronger in the medium term,” the bank said. Outside of the internet space, several semiconductor stocks also appeared on bank lists, including South Korean chipmaker Samsung Electronics. “Our outperform thesis on memory mainly revolves around the cyclical recovery of memory gains, which we believe will occur as we enter 2H23, and therefore rebound in value from current trough levels,” the bank said. Bernstein also likes Taiwanese chipmaker MediaTek. The bank said concerns of weakening demand for smartphones and prices “may be overdone” and urged investors to take advantage of the low value of the stock now. – CNBC’s Michael Bloom contributed reporting