Why China's equities look attractive again, especially in 'new economy' sectors
Among other things, its economy has stabilised after years of fiscal, monetary and credit easing.
CHINA's equity markets have been on a wild ride in recent years. After peaking in 2015 at its highest level since 2007, the Hang Seng China Enterprises index of Hong Kong-listed Chinese stocks had plunged almost 50 per cent by February 2016. Since then, the bull market has returned, with the index rallying 37 per cent.
We believe the China bull market can continue.
First, China's economy has stabilised after a number of years of fiscal, monetary and credit easing. Although growth has been on a secular downtrend since 2010, the National People's Congress has set a growth target for 2017 of "around" 6.5 per cent.
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