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Market review: May 23, 2016

Fang submitted 2016-05-23 15:31:05

Market review:

China stocks rallied about 0.64% in still slight volume, and some investors hunted some bargain around SHA 2800 threshold.

Research Notes:

Money flowed into Textile Machinery, Plastics and Wine Brewing sectors. HNA Capital(00616.sz), a real estate developer, rallied to limit-up for its expansion into lithium battery industry.

As we’re approaching the end of May, we expected some funds return to the equity market, after the rate hike risk of Fed fully priced in and some money outflow from commodity market. But we had to caution investors that the major component shares of SHA could have a dim future given the slowing down of China econ growth, the only bright spots , in our opinion, are still the high tech sectors with high growth, such as electronic car,VR/AR and new energy. The consumer staple sector could serve as a seasonal backup. And most cyclical sectors are one investors should underweight.

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