China - Market Strategy 05 (Jan 23 - Dec 24)

[winston]

CHINA STRATEGY – NATIONAL PEOPLE’S CONGRESS KEY TAKEAWAYS

Investors appear unimpressed by the National People’s Congress (NPC) budget for 2024. Premier Li Qiang did not take any question from the media yesterday; this did not alleviate market concerns amid prevailing market uncertainties.

The Government Work Report (GWR) expanded from 8 key tasks to 10 this year, with the additional 2 tasks focusing on technology and infrastructure development.

The GWR emphasised:-
i) nurturing new productive forces;
ii) developing the digital economy; and
iii) promoting domestic consumption.

We maintain our relative preference for the onshore A-share market, given the industry and sector mix will make it better positioned to benefit from government growth supportive policies.

Source: OCBC

[winston]

Chinese stocks make return to global portfolios on bottom bets

By Abhishek Vishnoi & John Cheng

“China could be one of the best performing equity markets as a trade over the next 12 to 18 months.”

Foreign money is trickling back in. A Morgan Stanley analysis shows global long-term investors have taken a pause in selling China, with some funds getting less bearish.

Deflationary pressure remains high and the external environment challenging with anti-China rhetoric expected to dominate ahead of the November US presidential election.

The MSCI China trades below nine times forward earnings estimates despite the recent rally, compared to readings exceeding 20 each for the S&P 500 Index and MSCI’s India benchmark.

Source: Bloomberg

https://theedgemalaysia.com/node/704251

[winston]

5 Reasons Chinese Equities Have Bottomed

by Andrew Rocco

1. FXI Inverse Head & Shoulder Pattern
2. Earnings Surprises & Turnarounds
3. Bad News Priced In?
4. Joining the AI Revolution
5. Insider Buying

Source: Zacks

https://www.zacks.com/commentary/223946 ... 313-FC03-A

[winston]

A-share buybacks surpass all of 2023 in two-and-a-half months

Share buybacks by Chinese firms in the first two-and-a-half months of 2024 have already exceeded all of 2023 by more than 50 percent, soaring to 22.7 billion yuan (HK$24.7 billion).

Fifty-seven listed companies have announced plans to repurchase shares or cancel them while 30 public enterprises have also joined the buybacks by reducing their registered capital.

The total number of 87 exceeds the total of 55 last year while the buybacks are worth a total of 22.7 billion yuan, up by 59 percent over all of 2023.

This month, the CSI 300 Index has rallied over 12 percent from its February lows, benefiting from the return of capital from overseas.

Meanwhile, Hong Kong-listed companies spent over HK$21 billion in repurchasing shares in January, a record since 2021 when Bloomberg began compiling the data.

Source: Bloomberg

https://www.thestandard.com.hk/section- ... alf-months

[winston]

HSBC Global Research: CN Has 6 Positives that Will Attract More Foreign Investors

Northbound funds have come back to the China market since the end of January 2024, driven by offshore China hedge funds and foreign long term investment funds, HSBC Global Research issued a research report saying.

Net inflows reached RMB60.7 billion in February, ending a 6-month capital outflows trend.

HSBC Global Research believed that there are 6 key positive factors that could attract more foreign investors into the mainland China market, including:
1) cheap valuations;
2) overseas fund positions in the mainland China market remain low, with the foreign participation rate for A-shares being 3.1% in February 2024, which is lower than India's 18.4% in September 2023 and South Korea's 27.4% by the end of 2022;
3) improved China-US economic relations;
4) policy stimulus;
5) still resilient RMB; and
6) strong traffic data after reopening.

Related News-bbCPCA: CN Retail Sales of Pax. Cars Gain 4% YoY for First 10 Days of Mar

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

Several Global Funds Shift Gear to Buy on A-shrs & HK Shrs, Citing Cheap Valuation & Improved Earnings

A number of global funds have turned bullish on Chinese equities.

Skagen of Norway and Boston Partners of the US have both increased their holdings in A-shares and Hong Kong stocks on the back of cheap valuations, reflected financial and regulatory risks, and improved corporate earnings.

By the end of February, Skagen had increased its exposure to A-shares and Hong Kong stocks to 32% of its emerging markets portfolio, up from 28% in September, and above the 26% of the MSCI Emerging Markets Index.

This is the second time in 22 years that the fund has increased its exposure to A-shares.

For Boston Partners, A-shares and Hong Kong stocks accounted for 47.5% of its emerging markets portfolio at the end of February, double the proportion six months earlier.

The fund has added to its holdings in JD-SW (09618.HK) , which has good earnings momentum despite a dynamic P/E ratio of less than 10x.

Meanwhile, the fund is also betting on LONGFOR GROUP (00960.HK) , which it believes is undervalued for its non-residential properties.

Source: AAstocks.com

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

We’re Watching a “Blood in the Streets” Moment for These Stocks Right Now

by Brett Eversole

Look, it’s hard putting money to work in a hated asset. I get that.

But we’re watching the “blood in the streets” moment unfold for Chinese stocks today. That’s not something you want to miss out on.

Source: DailyWealth.com

https://dailytradealert.com/2024/03/26/ ... right-now/

[winston]

China’s ‘national team’ bloats CSI 300 ETFs, as buying binge propels them to top of mutual-fund bracket

Direct purchases by the national team over a six-month period were a key support measure authorities took to end a three-year stock market rout

The Huatai-PineBridge CSI 300 ETF held US$18.1 billion at the end of last year, making it the biggest in China’s mutual-fund industry

by Zhang Shidong

Source: SCMP

https://www.scmp.com/business/china-bus ... e=homepage

[winston]

Does a US$1.75 trillion bounce in Chinese stocks mean the market’s long march to recovery has begun?

Chinese stocks at home and abroad have regained US$1.75 trillion of value since low points in January, soothing investors’ nerves worldwide

China has made a U-turn with pro-growth efforts, after mistakes like the zero-Covid policy exacerbated a slowdown last year: Alpine Macro

by Jiaxing Li

Source: SCMP

https://www.scmp.com/business/article/3 ... pe=section

[behappyalways]

China's Plunge Protection Team Bought $6.8 Billion In Stocks In The Second Half Of 2023
https://www.zerohedge.com/markets/china ... -half-2023