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Market review: May 05, 2016

Fang submitted 2016-05-05 15:31:05

Market review:

China stocks rose a little for PBOC once again increased the rev-repo quantity to inject more liquidity, to ease the tightening since May Day holiday.

Research Notes:

Money flowed into Entertainment, Foreign Trade and Electronics sectors the most. Shenzhen Hirisun Tech (300277.sh), an engineering project software developer, rallied to limit-up for its generous share transfer plan.

Though with easy monetary policy in both US and China can provide some liquidity support, especially weak DXY, for the equity market, we believed that SHA could have some difficult time to stay above 3000 in May, the recent trading range of 2900 to 3000 of SHA could not be broken without significant macro move and we probably won’t see such move in the incoming one or two months. We kept our recommendation to unload some shares with SHA above 3000, as a strategy reportly also adopted by Gov funds.

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