Investors look for triggers
Potential investment opportunities seen arising around the two sessions
Potential investment opportunities may arise in fields like advanced manufacturing, environmental protection and poverty relief as investors expect supportive government policies to be rolled out during the ongoing annual meeting of the country’s top legislative and political advisory bodies, market mavens said.
During the meeting, both national-level issues and major civil affairs will be discussed, which may bring changes to policies that affect the industries and markets concerned, they said.
The ongoing two sessions are expected to attract much more attention than previous ones, given the added significance of 2018.
It is the first year after the 19th National Congress of the Communist Party of China; the 40th anniversary of reform and opening-up; the key phase in the 13th FiveYear Plan period (2016-20); and, part of the business-end of a long-term goal of China to comprehensively build a moderately prosperous society by 2020.
Topics of the two sessions are expected to generate positive sentiment in the capital market, stock analysts said. Investors will likely pay close attention to certain policy keywords related to reform and opening-up, mass consumption, agriculture and new energy, said Guangfa Securities Co Ltd in a report.
Other key phrases they will track are highquality development, rural revitalization, environmental protection, medical care, food safety, military industry and a “longterm mechanism” for real estate regulation that encourages both home sales and rentals, according to Li Shaojun, an equity strategist at Guotai Junan Securities Co Ltd.
All this could mean potential opportunities for investment in advanced manufacturing, poverty-relief efforts in rural areas, pollution control and housing, Li said.
This year’s provincial-level two sessions, which have already ended, have also shown some common trends across the country.
For example, among 31 provinces, autonomous regions and municipalities of China, 19 have lowered local GDP growth rate targets for 2018, including Beijing, Tianjin and central China’s Hubei province.
Their blueprints for transformation and upgrade of industries bring opportunities for sectors such as advanced manufacturing and modern services, according to Guotai Junan Securities.
Environmental protection is a big theme in northern Hebei province. It said it expects to decrease average density of PM2.5 pollutant particles in air by 5 percent.
Similarly, Shanxi province said it plans to reduce carbon dioxide emissions by 3.9 percent and energy consumption by 3.2 percent per 10,000 yuan of GDP.
Guangfa Securities said that investors, in order to exploit potential opportunities presented by rural revitalization, may want to focus on new energy and new retail.
Internet giants such as Alibaba Group, JD and Suning have already developed rural e-commerce in China, it said.
More opportunities for investors are possible in the 11 free trade zones, the Guangdong-Hong Kong-Macao Greater Bay Area, the Xiongan New Area and southern Hainan province, it said.
But investors need to be cautious around the two sessions, analysts said.
Li Daxiao, president of the research department of Yingda Securities, said investors should not become overly ambitious as returns on theme-related investments cannot last long. “It’s important to retreat when such issues become too hot in the market.”