Market review: May 09, 2016

Fang • submitted 2016-05-09 15:31:05

Market Review:

China stocks continued the slump with SHA fell about 2.8%.The weaker than expected export data released in the weekend and incoming CPI and new loan data made investors more cautious about the growth of China economy. An article in People’s Daily criticized the re-leveraging in Q1 and confirmed the L shape of growth perspective also showed the divergence in the gov side, as Premier Li’ d biased to more easy monetary policy to keep the employment stable in the first 3-month.

Research Notes:

Money outflowed from Petrochemical, Software and Electronics sectors the most. Jiangmen Keheng Corp(300340.sz), a rare earth luminescent material producer, rallied to limit-up for its plan to acquire a lithium battery producer.

Commodity market also suffered from another of limit-down crash of coal and steel futures, as investors betting on a turning around of easy monetary policy and more tightening rule from the exchanges. It seems we’re too optimistic about the lower bound of SHA and 2900 for this week didn’t look like a firm support, hence the strategy could be keep exposure low and load some positions gradually as SHA dipping to 2800 this week.The bottom might be touched this Friday as macro data release finished. New energy, consumption goods and agriculture sectors are worth watching for bargain hunting in our opinion.

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author: Fang

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