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Market review: November 28, 2016

Fang submitted 2016-11-28 16:01:36

Market review:

China stocks advanced for another day with the globally optimism continued.

Research Notes:

SHA climbed about 0.46% with money flowed into Non-Ferrous Metal Mining, Construction and Paper Making sectors the most. Sichuan Road & Bridge Co. (600039)
) rallied to limit-up as investors believed that the firm should get more capital inject, mostly from the gov, to serve as a leader in the One-Belt-One-Road expand policy.

DXY dipped from the 102 height and barely hold the 101 line as investors switching out from the currency to embrace more risky assets. CNYUSD strengthened to 6.90 level with weakening of USD but there’s no much turn-around for the 1:7 expectation and it seems gov would try to hold the line and limit some capital outflow in case CNY touch 7. In commodity market, lead, zinc and natural rubber rallied to limit-up, mostly supported by weak Yuan. Investors are also expecting China PMI due Wednesday, to show that the economy stays above the expansion line, and also seasonally risky assets rose from Q4 to Q1 the year next with new loan available. Hence investors can keep their positions in sectors such as One Belt One Road, SOE Reform and International Trade, from both weak currency and Trump’s cancelling of TPP of Obama would benefit those sectors in the process of SHA rallying to 3300 and likely above.


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