Brokerages retain cautious outlook for stocks in Q2 2017
Securities brokers remained cautious about the outlook for domestic stocks in the second quarter of 2017, according to media reports.
Many brokers believe that enterprises are becoming less profitable and forecast there will be less liquidity in the market due to rising interest rates in the financial system, according to a report on Friday by the financial news provider hongzhoukan.com. In addition, many cities have launched new home- buying restrictions that might curb growth in the real estate industry.
Still, investors might be able to find opportunities in stocks that stand to benefit from the Xiongan new zone, the “One Belt and One Road” initiative or State- owned enterprise reform.
Major domestic stock indexes suffered their biggest losses in two weeks on Friday amid concerns over stepped- up regulation and whether an economic recovery could be losing steam.
The blue- chip CSI 300 Index fell 0.8 percent to 3,486.50 points on Friday, down 0.88 percent for the week.
The benchmark Shanghai Composite Index lost 0.91 percent to 3,246.07 points, down 1.23 percent for the week.
A slew of data last week led investors to question the sustainability of the economic recovery. Data showed peaking production price inflation, weaker- than- expected consumer price growth and a sharp decline in property sales growth.
“These are definite signs that the reflation trade is fading,” said Hong Hao, head of research at BOCOM International.
He added that the market had not fully priced in these changes to the country, partly because of suspected government intervention.
On Thursday, 14 Chinese com- panies suspended trading of their shares, citing the need to further evaluate the potential impact on business from plans for a new economic zone at Xiongan, North China’s Hebei Province.
Some market participants suspect the concerted moves are the result of regulators’ intervention.
An index tracking major lenders posted its fifth straight session of losses, after a flurry of moves by regulators to curb riskier lending, including a crackdown on misdemeanours with a focus on shadow banking.
For the day, sectors fell across the board, led by lenders and developers, as the country expanded restrictions on property investment to more cities.