Market review:

China stocks declined as Trump won the presidential election. SHA fell about 0.62% and stayed relatively firm compared to global market as many investors consider that Trump as the president could cause less tension in geopolitical issues than Clinton as he would focus on the domestic problems at the first place. But as he got very few political track record there’s still lot of uncertainty lying ahead.

Research Notes:

Money outflowed from Software Development, Entertainment and Petrochemical sectors the most. Sicuan Atlantic China Welding Consumables, Inc.(600558)rallied to limit-up as its profit would benefit from the price rebound in China real estate market through Q4 to Q1 the next year. USD barely held the 97 level as investors dumped the currency in reaction to the victory of Trump. CNYUSD rebounded to 6.77 as PPI beat the expectation and stay above 0 for the second month in a row. In commodity market, Chinese investors still favored coal and iron ore over gold and silver which are the default hedge for political uncertainty, despite that NDRC vowed to tame the rally. A weak USD also supports commodity market in general, hence we considered the Trump victory is at least neutral to commodity market. As a result investors can hold their positions in energy and environment protection sectors, and precious metal sector as well, and we considered the relatively strength of commodity over equity could stay longer as global investors pricing in President Trump.

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