Good news vs bad news in the Chinese stock market

The Chinese stock market has had positive developments supporting continued investment. Including the COVID-19 situation that has improved from reports of the number of new cases continuing to decrease. As a result, the government sector began to relax e.g. Sitting and eating in restaurants has begun to open in some areas of Shanghai. Reduce quarantine of travelers

Entry into China has decreased from 3 weeks to only 10 days, according to government relaxation policy. The profit forecast trend of Chinese listed companies has begun to stabilize, including the latest PMI index for both the manufacturing and service sectors. returned to rise above the 50-point level again. Meanwhile, China's inflation rate is still below the target level. As a result, the government sector has the ability to stimulate the economy through additional monetary and fiscal policies. This is in contrast to many countries around the world that are accelerating tight monetary policies.

Latest good news: China is preparing to launch a new economic stimulus plan. The Ministry of Finance is considering allowing local governments to sell more than $2.2 billion worth of special bonds in the second half of the year. The funds will be used to invest in infrastructure and real estate in China that have been affected by the COVID situation and lockdowns due to the "Covid Zero" policy.

Recently, the People's Bank of China (PBOC) has decided to maintain the policy interest rate for the 6th consecutive month. The PBOC announced that the 1-year medium-term lending rate (MLF), which is China's policy interest rate, will be maintained at 2.85% with the goal of Maintain sufficient liquidity in the financial system and at a reasonable level. And the International Monetary Fund (IMF) supports China to increase the use of monetary and fiscal policies to support an economy that is still weakened by lockdown measures. And more flexible strategies should be used to control the spread of COVID-19. To solve the problem of the slowdown of the Chinese economy, the second largest in the world.

There is still bad news in the Chinese stock market. But it seems like the market has absorbed a lot. This is reflected in China's major indexes last week which remained stable despite news that China's second quarter GDP expanded only 2% year-on-year. This is far below the government's target of 0.4%, as the economy has been hit hard by lockdown measures to control COVID-5.5 and the GDP figure is lower than analysts' estimates in a Reuters poll. Expected to grow by 19%. Shanghai has been ordered to lock down for up to 1 months, forcing people to stay at home. and order travel control This situation has resulted in economic activities being at a standstill.

Another bad news is the news that the Chinese government has fined technology companies in another 28 cases for monopolizing market dominance, with Tencent being the most hit with 12 cases, Alibaba being hit with 5 cases. In addition to Alibaba and Tencent being fined this time, there are also Didi, Bilibili, Weibo, Ping. An Good Doctor, Citic Capital and SoftBank as a result of strict supervision of the equalization policy. The fine is the final step after an investigation that took place during the Chinese authorities' strict policies over the past 1-2 years, which had an impact on China's major stocks. Prices have fallen continuously over the past year.

The prices of large Chinese stocks that were previously at risk from government regulation now have a reduced level of risk and impact. The share price has fallen to reflect the factors affecting it. This makes the current price level at an appropriate level. And institutional investors have given advice on gradually accumulating investments in Chinese stocks. from the opening of the city and policies to stimulate the economy from the government

The results of 4 Chinese stock funds, as selected by the asset management company, recommend that investors begin to accumulate gradually. in the past one month period The fund generated positive performance at the level of 0.66-7.20% as follows:

One-month results as of July 14, 65 from Morningstarthailand

– ASP-EVOCHINA Focus on direct investment and some invest in the main fund managed by T Rowe Price and invest in ETFs, invest in All Shares stocks, return +7.20%.

– KT-AShares The main fund is managed by Allianze, investing in A Shares, return +3.98%.

– SCBCHEQ The main fund is managed by Schroder, investing in All Shares, return +3.43%.

– TMBCOF The main fund is managed by UBS, focusing on investing in H Shares, return +0.66%.

Chinese stocks are diversified and listed on many markets. Investors who hold Chinese stocks and want investment advice can consult with Wealth Republic on their investment portfolios.