Saudi Arabia’s Public Investment Fund (PIF) bulked up its stake in Alibaba Group Holding by 41 per cent to 1.45 million shares, the biggest adjustment to its US$35.5 billion equity portfolio last quarter, according to its latest 13F filing on Saturday with the Securities and Exchange Commission. Its holding in two other Chinese American depositary receipts, Pinduoduo and BeiGene, was unchanged from the previous quarter.

Singapore’s Temasek Holdings boosted its holdings in JD.com by 110 per cent and in BeiGene by 1 per cent, while cashing out most of its stake in Pinduoduo. It maintained its position in five other Chinese companies including Alibaba and Yum China Holdings, according to its 13F filing.

The two sovereign funds’ bullish bets on Chinese stocks were in stark contrast to the bearish mood among global investors, who have been slashing their exposure amid an underwhelming market and rising geopolitical risks.

The divergence in global investors’ bets came as the “China reopening” play turned sour in the second quarter amid a sluggish post-Covid-19 recovery. The MSCI China Index, which tracks over 700 companies traded at home and abroad, slumped 5.6 per cent in the three months ended June, wiping out US$180 billion in market value.

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“We need to apply a geopolitical lens to all our investments,” Rohit Sipahimalani, chief investment officer at Temasek said last month.

“For example, we won’t invest in areas that are in the cross hairs of US-China tensions. We’ll prefer to invest in companies that have access to large domestic markets.”