Photographer: Qilai Shen / Bloomberg
Photographer: Qilai Shen / Bloomberg
China’s inventories are close to recovering the latest highs reached in 2015, when a bubble inflated prices before it burst. The assessments are more reasonable this time around and there are few signs of frantic speculation. Instead, the country’s relative isolation from the pandemic and a global bull run are helping to generate gains. The USA the delisting of Chinese companies has little impact on domestic sentiment.
The CSI 300 index is less than 2% below its closing high on June 8, 2015. The indicator has risen 49% since the low of March last year, while the country has released control of the coronavirus. The buying momentum is the strongest since July, while the index is trading 15% below its 2015 high on a future price-earnings basis.
IN FOCUS
- Shanghai Composite is also set for a bullish break: the index on Monday rose further resistance line around 3,460 points – a level that has limited benchmark gains since the merger of China’s shares in July.
- FTSE Russell he said he would exclude three more Chinese securities from their indexes, a measure widely expected after the US expanded its list of sanctioned companies. China United Network Communications, SMIC and Nanjing Panda Electronics will be cut on Thursday, adding to the eight companies is already on the removal list.
- Beijing may require American companies doing business in China to disclose any military links, according to the state newspaper Global Times. The report highlighted the “principle of reciprocity”, citing an adviser to the Chinese securities regulator.
- China’s central bank may use Tuesday’s correction to send a signal about its tolerance for the yuan’s recovery. The spot rate rose more in three months on Monday, expanding its premium from the last fixation to the highest since November.
MOVERS
- The NYSE decision to remove some Chinese ADRs “will reinforce HKEX’s status as the main listing place for companies on the continent,” according to Citigroup analysts, who also predicted more secondary listings for Chinese companies listed in the U.S. The Hong Kong stock operator’s shares jumped 68% in 2020, and Citi’s new target price of HK $ 500 implies a 13% gain.
- WuXi Biologics shares may fall in Hong Kong after a shareholder agreed to sell 102 million shares at HK $ 96.50 each. This implies a 6.5% discount at Monday’s closing.
- Zhongtai Cryogenic Technology may move in Shenzhen after estimating net profit increased by 180% in 2020.
For further reading:
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