Across The Border | China’s ‘best equity strategist’ joins others in pointing investors towards consumer and construction in Q4
The 19th Party Congress in October, will be closely watched for clues as to how many billions are likely in government infrastructure spending
China’s newly crowned “best equity strategist” is tipping consumer and construction stocks in the fourth quarter, as market sentiment turns more defensive, with risk of slowing economic growth firmly on the horizon.
Xun Yugen and his team at Haitong Securities in Shanghai have just been ranked first for equity strategy research, by the respected Shenzhen-based New Fortune magazine, and in his latest round of predictions he is also pointing investors towards home appliance makers and other consumer companies to outperform until the year end, due to their earnings visibility, as poorer-than-expected key August economic data prompts investors to seek safe wagers.
“The current backdrop of the macro-economy is more conducive to consumer and counter-cycle sectors,” said Xun.
Elsewhere, he sees builders as likely to benefit from increased expenditure on infrastructure projects as the government raises fiscal spending to stave off the slowing economy.
Xun’s most-recent calls are already proving more than prescient.
A gauge of consumer staples stocks on the CSI 300 Index rose to a record high on Monday after a month of consolidation.