A shares may rise in com­ing weeks

Big jump in on­line shop­ping, talk of pen­sion fund in­vest­ments stoke hopes of a re­bound

China Daily (Hong Kong) - - MARKETS | BUSINESS - By WU YIYAO in Shang­hai wuyiyao@chi­nadaily.com.cn

The A-share mar­ket is ex­pected to re­cover from re­cent de­clines as in­vestors are op­ti­mistic af­ter lat­est re­tail data re­flected ro­bust sales growth, an­a­lysts said.

Sea­sonal con­sump­tion and strong ex­pec­ta­tions that pen­sion funds will start in­vest­ing in stocks may drive mar­kets, they said.

The Nov 11 Sin­gles Day on­line sales con­trib­uted sig­nif­i­cantly to con­sump­tion growth, ac­cord­ing to data of the Na­tional Bureau of Statis­tics. E-com­merce sales grew 30 per­cent year-on-year in Novem­ber, amount­ing to 18.5 per­cent of to­tal re­tail sales, up from 15.8 per­cent in the same pe­riod last year.

“While this sales fes­ti­val has been on­go­ing for sev­eral years and there­fore its ex­is­tence it­self should not nec­es­sar­ily im­pact the year-on-year growth of re­tail sales, it has been gain­ing im­por­tance and there­fore still im­pacts year-on-year and sea­son­ally ad­justed se­quen­tial re­tail sales,” said Song Yu, economist with Gao Hua Se­cu­ri­ties in a re­search note.

Be­cause an in­creas­ing num­ber of listed com­pa­nies in sec­tors like foods and bev­er­ages, cloth­ing, jew­elry, tourism and trans­porta­tion are sell­ing through both on­line and off­line chan­nels, many are ben­e­fit­ing from the sea­sonal sales surge.

An­a­lysts said that last week’s US Fed rate hike could mean bet­ter prospects and stronger con­fi­dence in eco­nomic re­cov­ery, which would ben­e­fit re­tail and con­sump­tion-driven sec­tors in the long run, par­tic­u­larly trade and ex­port busi­nesses.

The move will also help make the A-share mar­ket more sta­ble, with more in­sti­tu­tional in­vestors and value-ori­ented in­vestors par­tic­i­pat­ing.” Dai Kang, an­a­lyst with Hu­atai Se­cu­ri­ties

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