Photographer: Qilai Shen / Bloomberg
Photographer: Qilai Shen / Bloomberg
Chinese stocks are close to recovering from highs last reached in 2015, when a bubble inflated prices before bursting. Valuations are more reasonable this time around and there are few signs of insane speculation. Instead, the country’s relative isolation from the pandemic and a global bull run help increase profits. The USA The delisting of Chinese enterprises has little effect on domestic sentiment.
The CSI 300 index is less than 2% lower than the closing high from June 8, 2015. The benchmark has risen by 49% since the low of March last year as the country shook off the grip of the coronavirus. The buying moment is the strongest since July, while the index is trading 15% lower than its 2015 high on a forward price earnings basis.
IN FOCUS
- The Shanghai composite is also ready for a bullish outbreak: the index continued to push above a key on Monday resistance 3,460 points – a level that has limited profit for the benchmark since China’s stock meltdown in July.
- FTSE Russell said it would remove three more Chinese securities from its indices, a move widely expected after the U.S. expanded to its list of sanctioned companies. China United Network Communications, SMIC and Nanjing Panda Electronics will be cut from Thursday, adding to the eight companies already on the removal list.
- According to Beijing, Beijing may require US companies doing business in China to disclose any military ties state-sponsored newspaper Global Times. The report calls the ‘principle of reciprocity’, referring to an adviser to China’s security regulator.
- The central bank in China could use Tuesday’s correction to signal its tolerance for the yuan rally. The spot rate rose the most in three months on Monday, increasing its premium against the last correction since November.
MOVERS
- The NYSE’s decision to remove some Chinese ADRs will ‘strengthen HKEX’s status as the most important place for listing of mainland companies’, according to Citigroup analysts, who also predicted more secondary listings of Chinese companies in the US. Shares of the Hong Kong stock exchange operator rose 68% in 2020, and Citi’s new HK $ 500 price target implies a gain of 13%.
- Shares of WuXi Biologics may fall in Hong Kong after a shareholder agreed to sell 102 million shares at HK $ 96.50 each. That means a 6.5% discount until the end of Monday.
- Zhongtai Cryogenic Technology is estimated to move to Shenzhen net profit increased to 180% in 2020.
For further reading:
China says inefficient companies must harden or prepare to fail
Symbolism is the wrong word for China NYSE delisting: Tim Culpan
CHINA / HK DIARY: ADRs fall on the delisting note; Mortgage standards
CNOOC is seen as the next potential US delisting target: China Today
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