Market review:
New loan data and money supply data beat in Jan, with supportive speech on economy by Premier Li, following talk of Zhou of PBOC, boosted China stocks for a second day, and closed at 2836.57.
Research Notes:
Money flowed into Non-banking Financials, Software and Electronics sectors. Though money out flowed from metal producers in general, Liuzhou Steel, a steel producer suffered from heavy loss in 2015, rallied to limit-up on restricting hope.
Though we had not seen many convincing data for China economy to shift into a higher gear, investors are positioning for the People Congress meeting at the start of March, expecting for measures to boost growth. The recent rallies, with short covering in stocks, currency RMB and commodities, are justified in our opinion, but only for the short term. For next 2 weeks we can watch whether SHA can test that 3000 threshold, and it could provide good opportunities to get rid some share of risky assets and make some hedge for the rest of the year.
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