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Tuesday 7 April 2009
MSCI China May Rise 15% by End-2009, JPMorgan Says
The MSCI China Index may rise 15 percent by the end of the year as growth in the world’s third- biggest economy recovers, according to JPMorgan Chase & Co.
MSCI China May Rise 15% by End-2009, JPMorgan Says
April 6 (Bloomberg) -- The MSCI China Index may rise 15 percent by the end of the year as growth in the world’s third- biggest economy recovers, according to JPMorgan Chase & Co.
The MSCI China, measuring mostly Hong Kong-traded Chinese companies, may end the year at 50, JPMorgan analysts led by Frank Gong said, 15 percent higher than the April 3 close. The brokerage also predicted that the Hang Seng China Enterprises Index will advance to 10,000, a gain of 17 percent.
JPMorgan is forecasting further gains for the MSCI China, following a 60 percent rally from its three-year low in October. The country’s manufacturing grew last month for the first time in six months, new bank lending quadrupled in February while vehicle sales rose 25 percent, suggesting that the government’s 4 trillion yuan ($585 billion) stimulus plan is helping to revive the economy.
“While the monetary and fiscal stimuli-related foreign asset investment strength is important, the domestic consumer strength is also a key force driving the China recovery,” Gong wrote. “The consumption-led economic recovery in China, if sustainable, could help further re-rate the MSCI China.”
JPMorgan’s year-end forecast for the MSCI China Index is higher than an earlier target, the report said, without giving the previous estimate for the index.
Investors should be “overweight” in refiners and independent power producers, because these industries will benefit from a potential price increase by the government.
China Petroleum and Chemical Corp., Asia’s largest refiner, and Dongfeng Motor Group Co., the biggest Chinese automaker listed in Hong Kong, are among the brokerage’s top picks in the market. It also favours shares of Guangzhou R&F Properties Co., Bank of Communications Co. and Industrial & Commercial Bank of China Ltd., according to the report.
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MSCI China May Rise 15% by End-2009, JPMorgan Says
April 6 (Bloomberg) -- The MSCI China Index may rise 15 percent by the end of the year as growth in the world’s third- biggest economy recovers, according to JPMorgan Chase & Co.
The MSCI China, measuring mostly Hong Kong-traded Chinese companies, may end the year at 50, JPMorgan analysts led by Frank Gong said, 15 percent higher than the April 3 close. The brokerage also predicted that the Hang Seng China Enterprises Index will advance to 10,000, a gain of 17 percent.
JPMorgan is forecasting further gains for the MSCI China, following a 60 percent rally from its three-year low in October. The country’s manufacturing grew last month for the first time in six months, new bank lending quadrupled in February while vehicle sales rose 25 percent, suggesting that the government’s 4 trillion yuan ($585 billion) stimulus plan is helping to revive the economy.
“While the monetary and fiscal stimuli-related foreign asset investment strength is important, the domestic consumer strength is also a key force driving the China recovery,” Gong wrote. “The consumption-led economic recovery in China, if sustainable, could help further re-rate the MSCI China.”
JPMorgan’s year-end forecast for the MSCI China Index is higher than an earlier target, the report said, without giving the previous estimate for the index.
Investors should be “overweight” in refiners and independent power producers, because these industries will benefit from a potential price increase by the government.
China Petroleum and Chemical Corp., Asia’s largest refiner, and Dongfeng Motor Group Co., the biggest Chinese automaker listed in Hong Kong, are among the brokerage’s top picks in the market. It also favours shares of Guangzhou R&F Properties Co., Bank of Communications Co. and Industrial & Commercial Bank of China Ltd., according to the report.
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