Chinese Equity Recap

Via Bloomberg:

China Stocks Rise Most in Two Weeks on Report of Higher Exports

China’s stocks rose the most in more than two weeks as Reuters reported a surge in the nation’s exports in May and higher-than-estimated new loans, signaling Europe’s debt crisis hasn’t derailed economic growth.

The Shanghai Composite Index climbed 2.5 percent to 2,576.93 at 2:48 p.m., reversing a decline of as much as 0.5 percent and set for its biggest gain since May 24. The Shanghai gauge has lost 22 percent this year on concern policymakers will tighten policy excessively even as Europe’s debt crisis slows growth in China’s biggest export market.

The CSI 300 Index rallied 2.6 percent to 2,769.35, with an index tracking financial stocks surging 4.1 percent, the most since Dec. 4, 2009.

Monetary Policy

The loan figure “is far more than our estimates,” Jacky Zhang, stock analyst at Capital Securities said in a phone interview in Shanghai. “It shows the government may adopt a relatively easier monetary policy in the second half.”

Reuters also reported consumer prices rose 3.1 percent in May, citing the same unnamed people. Economists forecast a 3 percent gain in consumer prices.



The new loan plans in China are trying to incentive the market, especially the non-housing markets. Still waiting for the new policies to solve the demand and extra supply problem in equity market.



Liz Liu
Summer Analyst
Analyze Capital LLC