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Market review: May 16, 2016

Fang submitted 2016-05-16 15:31:05

Market Review:

China stocks rose about 0.84% as bears taking a break when SHA approaching 2800 threshold. Some speculation on possible MSCI inclusion reignited though we didn’t expect it could happen in June.

Research Notes:

Money flowed into Electronics, Glass and Chemical Fiber sectors the most. CHTC Helon Co., a chem fiber producer, rallied to limit-up, for its expansion into online gaming business.

Both CNYUSD and Shibor rate showed some declined of risk appetite and tightening of liquidity supply, while commodity futures trying to bottom up after 3 weeks of selling off. As China gov may stick to its “Destock and Deleverage” plight for several months, we recommend to load up with Agriculture, Wine and Food sectors as SHA approaching 2800, to play defense with those un-cyclic stocks with upside potential on weather risk, whatever it’s flood or heat, during the summer season.

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