China rising stock in the control reserve rules

China rising stock in the control reserve rules

Gao Hua had the highest accuracy rate at 60 percent with 55 correct recommendations out of 88, followed by Capital Securities Corp. (6005) and UBS AG (UBSN), according to Bloomberg Rankings. Masterlink Securities Corp., Morgan Stanley, China International Capital Corp., HuaChuang Securities, JPMorgan Chase & Co. (JPM), Credit Suisse Group AG (CSGN) andDeutsche Bank AG (DBK) rounded out the top 10 brokerages.
Morgan Stanley Huaxin Securities Co., based in Shanghai, said on April 24 that the Chinese index may rally another 30 percent this year, led by banks and developers. Guotai Junan Securities Co., also located in Shanghai, forecasts the gauge may hit 2,800 by the end of the second quarter. Morgan Stanley and Guotai Junan advised buying stocks before the Shanghai gauge’s last bear market ended in July 2010.
Wang has an overweight allocation for stocks in the insurance, property and construction material industries, suggesting investors should hold more of the shares than are represented in benchmark indexes. Gaohua cut the coal industry to neutral from overweight, he said.
Wang recommended Chinese consumer and health-care stocks in April 2010, and they finished among the top three best- performing industries that year even as the Shanghai Composite slumped. A combined 33 percent loss in 2010 and 2011 for the Shanghai index dragged down the gauge’s valuation to a record low of 8.9 times estimated earnings on Jan. 6, according to weekly data compiled by Bloomberg. The index now trades at 10.2 times estimated profit, compared with the MSCI Emerging-Markets Index’s multiple of 9.7 times.
China’s stocks fell yesterday as a May 29 report from the state-run Xinhua News Agency damped speculation of increased government stimulus. Credit Suisse said in a May 28 report that spending in response to China’s economic slowdown will probably range from 1 trillion yuanto 2 trillion yuan.
“The Chinese government’s intention is very clear: It will not roll out another massive stimulus plan to seek high economic growth,” Xinhua reported, without attributing the information. “Current efforts for stabilizing growth will not repeat the old way of three years ago.”
China’s central bank has cut lenders’ reserve-requirement ratios three times since November, fueling speculation the government will allow banks to lend more to cash-strapped companies and step up machinery investment. New bank lending was 681.8 billion yuan in April, down 32 percent from the previous month, central bank data showed on May 11.
China will start a number of “key infrastructure projects that will contribut to are vital to the overall economy and can facilitate growth” and speed up construction of railway, environmental protection and rural projects, the government said on May 23, summarizing a meeting of the State Council, or cabinet.