Market review: September 19, 2016

Fang • submitted 2016-09-19 01:09:16

Market review:

China stocks rebounded after the mid-autumn holiday with SHA climbed about 0.77%. Investors felt that SHA 3000 should be a firm support and return to the market after position-cut in the week before. Speculators also lower their expectation for the Fed to raise the rate in FOMC 21st.

Research notes:

Money flowed into Banking, Construction Machinery and Insurance sectors the most. China Nuclear Engineering Co (601611.sh). rallied to limit-up as British gov confirmed a $ 24-billion nuclear project with firms of China and France.

DXY stopped around 96 line as investors started to trade the “no-hike” expectation and CNYUSD going stronger to 6.67 with some liquidity squeeze in both China mainland and HK interbank market with both O/N and 1-WeekShibor and Hibor staying high. In commodity market, soybean, natural rubber and coal led the rally as DXY weakness supported a general rising in commodity price and too much precipitation in US Midwest also fueled some rebound in CME agriculture sector. As we don’t expect Fed would raise the rate in Sep, some increase of risk exposure is recommended and sectors related to Apple iPhone manufacture, SZ-HK link and Electronic Cars would be our favorite picks. We also raised our mid-term target for SHA to 3100 above as we believed the risk appetite would recover more after FOMC.

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author: Fang

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