Credit Suisse's Woods: Positive on Chinese Equities

John Woods discusses the impact of the Offshore Yuan hitting a record low on equity markets, noting that unlike previous periods, the current situation shows signs of stabilization in growth and stronger earnings expectations. He highlights a shift from property to equity investments in China due to government clampdowns. Woods also addresses concerns about capital outflows, suggesting that controlled depreciation may not trigger significant outflows. He emphasizes the importance of infrastructure investment as a fiscal stimulus to drive growth, particularly in Asia.

What factors have contributed to the recent stability in equity markets despite the renminbi's depreciation?

• Increased volatility in the property market

• Stable currency baskets and signs of growth stabilization

• Unstable currency baskets and declining growth

• Government intervention in the equity market

What is the relationship between the property and equity markets in China?

• They are positively correlated

• They have no correlation

• They are directly proportional

• They are negatively correlated

Which sectors are attracting investments in China due to the rotation from the property market?

• Healthcare and pharmaceuticals

• Banking and financial services

• Consumer discretionary and non-discretionary

• Technology and innovation

Why is infrastructure investment considered a natural response to low interest rates and weak growth?

• It generates employment and supports economic growth

• It is a short-term solution

• It focuses on reducing inflation

• It requires minimal fiscal stimulus

What is the expected impact of infrastructure spending in Asia?

• It will lead to higher inflation

• It will support economic growth and employment

• It will reduce government debt

• It will decrease urbanization