With the heavy load of previous real estate industry adjustment, overseas market concussion causes continuous A-share decline last week. Investors hold negative view and number of listed companies with share price below offering price and net share value grows, some with better performance even see PE ratio below 10x; underestimation of blue-chip shares still exists. We hold that with support by better economy and better-than-expected performance growth, mid & long-term market will continue uptrend and it is likely to see positive profit within the year, thus investors should not be over-pessimistic. However, in short term, pressure arising from capital and political aspects as well as oppressed market atmosphere will hold index low; we suggest short-term investor keep cautious.
Capital and political aspects will undertake pressure in short term.
In mid & long-term view, stock market is subject to economic cycle, performance of listed companies, yet in short term, it is closely related with their tightness degree.
Crisis alarm of sovereign credit still exists, which causes limited influence on economic resurgence.
With the heavy load of previous real estate industry adjustment, overseas market concussion causes continuous A-share decline last week.
Investment Opportunities
Influenced by series of domestic and overseas elements, investors hold negative view, which dominates the market trend; overall market estimation has diverged average level of past ten years. We hold that with support by better economy and better-than-expected performance growth, mid & long-term market will continue uptrend and thus investors should not be over-pessimistic. However, in short term, pressure arising from capital and political aspects as well as oppressed market atmosphere will hold index low; we suggest short-term investor keep cautious and follow mid & small-cap shares with large increase in the first session yet without performance support. As of investment opportunity, investors may concern about gold plate, electrical equipment and Xinjiang plates benefited from energy saving & emission reduction and area revitalization.