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<Research>HSBC Research: CN A Shrs May Rise 25% Max. in 12 Mths after 1st US Rate Cut
Recommend 3 Positive 1 Negative 3 |
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Assuming that the US economy has a soft landing and the Fed begins its rate cut cycle, HSBC Global Research expected China’s A-shares could rise by up to 25% in the next 12 months, with growth sectors outperforming, while the key is strong earnings growth, HSBC Global Research said. The broker also mentioned that a recession in the US may further lower A-share profit forecasts, which could be negative to the China equities. The broker expected the US to cut interest rates three times, by 25 bps each, starting in mid-September. It forecast the Wind All-A index and HSCEI to return an average of 24.9% and 1.5% respectively in the 12 months after the first US rate cut, and to fall an average of 42.7% and 6.7% if there is a recession in the US economy. The US rate cut could trigger a new round of A-share ratings and provide more room for the PBOC to ease, said the broker, which also offered three stock screens: high earnings growth with relatively low PE (mainly electronics and electronic equipment); high dividend yields (focusing on gas and oil names); and names with improved interest coverage ratios from lower borrowing costs. AAStocks Financial News |
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