Chart of the day: Chinese liquor makers a safe bet
Chinese investors are shifting their attention back to companies with a secure stream of future income again. After a month of consolidation, a gauge of consumer staples stocks, mostly liquor brewers, rose 1.6 per cent to a record on Monday amid a return of traders’ interest as weaker-than-expected economic data for August pointed to downside risk for the country in the second half. Earnings for liquor makers, however, seem immune to slowing economic growth, thanks to robust mass demand. In the first half of the year, Kweichow Moutai, the country’s biggest maker of baijiu, received 17.8 billion yuan (US$2.7 billion) in advance payment from customers, a record since its listing in 2001 and already surpassing the 17.5 billion yuan for the whole of last year. Advance payments, which are categorised as liabilities in balance sheets, are recognised as revenue after the goods are delivered to customers.