China's Uneven Recovery: Citi Predicts Intense Policy Roll-out and Its Impact on the Stock Market
Investors should closely monitor these factors' influence on the Chinese stock market and companies.
$Citigroup(C.US$ Citi Research reported that China's manufacturing PMI rose to 49.3 in July, slightly exceeding expectations, while the non-manufacturing PMI fell to 51.5, missing the target due to real estate weakness and economic reopening challenges.
The recovery in China is uneven, with a potential convergence in the early stages. Industrial momentum shows signs of bottoming out, but the real estate sector remains uncertain. Citi believes the recovery in real estate is only halfway through the short-term upcycle.
Despite these variations, Citi doesn't expect these developments to jeopardize the government's pro-growth policies. 3Q23 intense policy implementation is anticipated, including RRR and policy rate cuts, treasury bond issuance, and real estate easing measures. The effectiveness of these efforts may impact economic data from 3Q23 to 4Q23. Investors should closely monitor these factors' influence on the Chinese stock market and companies.
$iShares MSCI China ETF(MCHI.US$ $Global X MSCI China Consumer Discretionary ETF(CHIQ.US$ $CSOP Hang Seng TECH Index ETF(03033.HK$ $Hang Seng TECH Index(800700.HK$ $HKEX(00388.HK$ $CNH/CNY(CNHCNY.FX$ $COUNTRY GARDEN(02007.HK$ $CG SERVICES(06098.HK$ $COUNTRY GARDEN HLD(CTRYY.US$ $EVERGRANDE(03333.HK$ $LONGFOR GROUP(00960.HK$ $SMIC(00981.HK$ $SENSETIME-W(00020.HK$ $Tencent(TCEHY.US$ $TENCENT(00700.HK$ $Alibaba(BABA.US$ $BABA-SW(09988.HK$ $BIDU-SW(09888.HK$ $Baidu(BIDU.US$ $China Concept Stocks(BK2517.US$
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