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Market review: January 21, 2016

Fang submitted 2016-01-21 15:31:05

Market review:

Selling in SHA continued into a second day, fell over 3%,the overnight selling in Europe and US market felt in Asia hours, despite more SLF offered by PBOC.  

Research Notes:

  1. Almost all sectors of A-Share recorded money outflow, with electronics, manufacture and finance sectors sold the most. Some biochem and medicine stocks showed firmness against the pressure. 

  2. Hang Seng China Enterprises expand Wednesday’s plunge. The three-month Hong Kong Inter-Bank Offered Rate climbed to the highest level in more than six year, threatening higher borrowing costs for the city’s property developers.

Gov is fighting to prevent a vicious cycle of capital outflows and a weakening currency as exchange rate can be treat as stock price of each country. We felt that the market went into an oversold region as SHA went below 2900 again, for global central banks, especially Fed can show more policy shifting to accommodative side, it could be a time to make a bargain hunting list when the turmoil in CNYUSD calming down.

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