That's their headline not ours. We don't get nervous, preferring instead to go directly to sheer terror.
From MarketWatch, March 9:
Steps to get the Chinese economy growing could boost these stocks
Wary of U.S. stocks because you think the valuations look rich? China stocks are a solution. If you’re reluctant to buy, given all the negative headlines about China, counterintuitively that’s part of the reason to buy. Sentiment towards Chinese stocks is so negative, it’s a decent contrarian indicator telling us this is the time to get exposure.
Valuations support the case. The FTSE China A50 Index XX:XIN9X000 and China’s CSI 300 Index XX:000300 are trading at discounted valuations not seen in years, says Jason Hsu, the chief investment officer of Rayliant Global Advisors, which runs the Rayliant Quantamental China Equity RAYC exchange-traded fund.. Those indices recently traded a bit below 10 times trailing earnings, not much above the low of eight times seen in 2015.
Sure, there are a lot of negatives. Global trade wars, worries that Chinese might use its military to occupy Taiwan, and a slowdown in the Chinese economy, to name a few. But by now, the fears are more than priced into the Chinese market, Hsu says.
Besides, a lot could go right from here. Here’s a look at what could change and help the Chinese economy and investor sentiment towards China, along with several Chinese companies to consider.
What could go right
Big picture, China’s president Xi Jinping is paying attention to economic growth in a significant way, with several bullish implications. “We are seeing Xi Jinping moving away from a fixation about China’s position on the global stage, back to the economy,” Hsu says. For example, Xi has made it clear both at home and abroad that the use of military force to reunite with Taiwan is not on his agenda.This shift has three big potential implications for investors:
1. China may unleash fiscal stimulus: A loose monetary policy hasn’t helped enough since loan demand remains low. This is why we could see fiscal stimulus announced at an important policy meeting taking place in China the week of March 4, says Sharukh Malik, a portfolio manager on the Asian & Emerging Market equities team at Guinness Global Investors.
Watch for news out of the Two Sessions Forum happening this week alongside the National People’s Congress annual meeting. “If there is new stimulus, that is when it will be announced,” Malik says.
2. China is directing capital to key growth sectors: To boost growth now that the property investment machine has stopped generating wealth (more on this below), China is directing capital to key sectors such as electric vehicles and the supporting supply chain (batteries, natural resource extraction), industrial automation and chip manufacturing, says Malik.
Consider that recent smartphones released by China’s Huawei contain sophisticated 7-nanometer chips made by China’s Semiconductor Manufacturing International 981 ,
according to TechInsights, a chip- sector research outfit. These sectors probably won’t become large enough to offset the property sector decline until 2026-28, Malik says. But early signs that these investments are working will improve investor sentiment.3. The Chinese government is buying stocks on weakness: Earlier this year China’s government announced it is purchasing stocks to support the equity market. There are also new restrictions on short selling. “The government has been aggressively buying large-cap stocks,” Hsu says. Substantial selling “triggers buying and the stock index gets back above water,” he says. Hsu also notes that the government is leaning on banks to convince high-net-worth clients to move into stocks from deposits....
....MUCH MORE
A couple weeks ago I mentioned that after waiting very patiently for almost two years we finally called a bottom in the CSI300 index. And were a month early.
But all's well that ends well and the turn looks to be real so in this year of the dragon there may be some serious money made in Shanghai and Shenzhen.
