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Market review: October 27, 2016

Fang submitted 2016-10-27 23:29:42

Market review:

China stocks declined as money supply continued to get tighter in China market as the firms paying tax and margin in October.

Research Notes:

SHA fell about 0.13% with money outflowed from Coal, Electronic Devices and Construction the most. Shandong Xinneng Taishan Power Generation Co.(000720.sz), rallied to limit-up as its low emission generators would go online and it could bring revenue increase of about 10.13-million RMB for the year.

DXY stayed high at 98.65 with overnight flash PMI beat the expectation. CNYUSD remained low around 6.77 despite the rebound of Shibor in inter-bank market. In commodity market, rape seed meal, corn and soybean meal led the rally as soybean in CME reclaimed the 1000 threshold as more investors entered the weather market speculation of South America growing season. And such speculation could last into December in its typical seasonal pattern. We observed that money chasing agriculture chemicals, wine brewing and coal sectors and believed those sectors could remain attractive into the end of the year, hence investors could hold some shares from the sectors while hedge the positions with index futures and options. We believed that SHA would fluctuate within 3050~3100 for the next several weeks as global investors stay cautious on US presidential election.


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