Market review:
China stock market rallied on stimulus hope before the CNY (China New Year) holiday, closed at 2781.02.
Research Notes:
More investors started to believe China gov will resort to the old way of economy stimulus, aka, boosting real estate industry, as other methods had not worked well so far to turn around the bleak expectation of GDP growth. The speculation, in our opinion, is proper in the short term with some short squeeze in the commodity futures market, rather than big money really wants to bet on new 4-trillion plan,so could be risky in a longer term perspective.
We maintain our recommendation to stay away from the cyclical sectors, such as mining and steel producing. While there's always new china to invest in, some sectors such as fintech, biotech could be quite charming.
Copyright by FangQuant.com