China Stocks May Face Corrections in 2020, BOCOM's Hong

The video discusses the market performance in 2019, highlighting the gains across asset classes and the lag in the Hong Kong market. It contrasts the performance of large cap and small cap companies, noting the challenges smaller firms face. The video predicts market trends for 2020, expecting tepid gains and potential rebounds for smaller companies. It also analyzes the Shanghai Composite, considering economic data and trade deals, and provides a forecast for its performance.

What was a significant characteristic of the market performance in 2019?

• It was a year of losses across all asset classes.

• There were no corrections throughout the year.

• The gains were concentrated in specific sectors.

• The Hong Kong market outperformed major indices.

Why are smaller firms in the Chinese market struggling compared to large-cap companies?

• They dominate the market indexation.

• They have higher returns than the cost of capital.

• Banks are eager to lend to them.

• They are making returns lower than the cost of capital.

How does market indexation affect investment in large-cap stocks?

• It decreases the weight of large-cap stocks in the index.

• It forces funds to buy more of the leading companies.

• It has no impact on investment decisions.

• It encourages investment in smaller firms.

What is a potential catalyst for the Shanghai Composite in the coming year?

• A decrease in factory deflation.

• The phase one trade deal.

• An increase in the Fed's balance sheet.

• A decline in economic data from China.

What is the expected bottom range for the Shanghai Composite based on earnings growth?

• 2400 to 2500

• 2800 to 2900

• 3000 to 3100

• 2600 to 2700