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Market review: May 24, 2016

Fang submitted 2016-05-24 15:31:05

Market review:

China stocks fell about 1% as investors selling on the gain of yesterday, with shrinking risk appetite.

Research Notes:

Money outflowed from Highway, Electricity Generation and Developing Zone sectors the most. Futian Automobile (600166.sh) rallied to limit-up for the strength of the automobile sector.

Investors bet on the idea that most, if not all, of listed car manufacturers would expand their new energy car business, which can increase their profit. And the move is not a surprise to us, for money already pushed lithium battery industry up and it’s a natural move into new energy auto sector. The recent comment from Premier Li that Gov should de-capacity some industry without increase the unemployment discourage investors, for they don’t see the determination from this “reform without unemployment”. Money also escape from most commodities as the loom of June Fed meeting brought the strong DXY back and lack of new extreme weather events to support the prices of agri-commodities. We believed that there could be some rebound after June Fed meeting and it’s a good time to load some un-cyclical shares when SHA touch 2800 psychological threshold.

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