Shanghai and Shenzhen stock market hit largest weekly surge last week, and turnover substantially increased; investors steadily held the position and market maintained strong trend.
The basic motivation of this rebound is investors’ obscure anticipation on relax policy regulation after the formation of rapidly falling economy trend.
As of following trend, institutional investors generally hold cautious attitude currently, but attentions should be given to possible inconsistency of actual operation and anticipative trend.
Flood damage is quite serious in China in 2010 and it has affected 27 provinces currently, which causes sharp surges of vegetable price; grain price sees not big surge, but it still increass for consecutive four weeks.
Number of IPO is 23 in July 2010; financing speed maintains fast.
Policy emphasizes on structure in future.
Development plan of new energy industry indicates additional direct fund of Rmb5,000bn in the coming 10 years.
Income distribution reform is also a hot issue recently, which is expected to see substantial breakthrough in the second half year.
Investor may grasp investment opportunities through the following four aspects: 1) strategic emerging industries benefited from economic transition, such as new energy and information technology; 2) M&A and restructure benefited from structure adjustment, mainly restructure of listed state owned enterprises; 3) consumption sectors benefited from income distribution reform, like home appliance industry; and 4) industries benefited from post-disaster reconstruction, like engineering & mechanics, cement and seed industry.