the V-shaped economic recovery continues and becomes more broadly based (pages 3-5).
We continue to see strong risk appetite for Chinese equities as better alternatives for cash, as the earnings yield gap remains high in a low interest rate environment at 7-8% for Hong Kong market indices and more than 4% for the A-share market (pages 6-7).
Policy stance has shifted to “structural adjustment” from “ensuring growth”. The five key areas are industrial revitalisation, regional development, developing a low-carbon economy, livelihood and spurring consumption growth. Although itsupporting SMEs, improving people’s may increase market volatility in the short term, it’s good for the economy and market in the long run because it lowers the risk of overheating and asset bubbles (pages 8-10).
Liquidity should remain ample in both HK and A-share markets, though pressure is building as the pace of equity offerings picks up (pages 11-13).
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