Amid a slowdown in domestic growth and escalation of trade tensions with the USA, the recent meeting of the
politburo, the top decision-making body of China’s ruling party, stressed on stabilizing employment, financial markets,
international trade, and foreign investment and called for a more active fiscal policy to expand domestic demand
and infrastructure investment. Although market expectations of monetary and fiscal stimulus should support share
prices, any unfavorable data points and news flow on a trade war could continue to be a drag on their valuations.
We thus expect volatility in Hong Kong and China equity markets to stay high in the near future.