Chinese Economic Update – 11 November 2014

An event filled week for premier Xi Jingping; Chinese equities continue their ascent as countdown to mutual access begins

Chinese equities continued to push higher over the last 10 days as resilient economic data underlined what was already a bullish mood among local investors.

In detail, a volley of manufacturing and industrial numbers came in on par with expectations last week, while on Monday morning CPI inflation data indicated that prices charged to consumers held steady during October.

This was while the Chinese premier Xi Jingping, over several days of conferences and talks (G20 + APEC), repeatedly played down the challenges facing the Chinese economy at present.

All in all, recent data emerging from China is consistent with the view that the pace of growth has remained ahead of earlier expectations, indicating that for now at least; the economy has avoided a hard landing.

However, growth is still expected to slow further throughout 2015 and it is not possible to know at what pace this will happen. As a result, there remains a risk that further deterioration could still evolve into a hard landing scenario.

Despite this, the trajectory of Chinese equities over the near term is unlikely to reflect the risks facing the economy. This is because we, like many others, continue to expect that the pending partial liberalisation of local equity markets will continue to underpin the bullish sentiment of both local and international investors.

On this note, the first day of mutual access trading will be on Monday 17 November 2014.

SSE Composite Index // 10 Minute Intervals

SSEINDEX11NOVEMBER

.

IMPORTANT:
The contents of this report and the Stockatonia website (https://www.stockatonia.co.uk/) have been prepared to provide general information only, and as such, the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Please always remember that the value of investments may fall as well as rise. Investing in securities, and any other products associated with them, carries a high degree of risk and may not be suitable for all investors. For advice or guidance related to investing in securities markets, please consult with your own financial adviser.