HSBC’s Fan Sees Fundamental Support for Recovery in China Equities

The video discusses the rapid changes in the China equity market, highlighting the strong rally in early 2019 due to improved risk sentiment and policy expectations. It examines market valuations, potential growth, and structural reforms. The discussion also covers investor behavior, driven by FOMO, and projections for index performance. The impact of global investment strategies and the MSCI inclusion factor on Asia markets is analyzed, emphasizing long-term structural allocation and supportive policy environments.

What was a major factor contributing to the strong rally in China equity markets in early 2019?

• Normalization of risk sentiment

• Decrease in global oil prices

• Increase in interest rates

• Reduction in corporate taxes

What is expected to narrow the equity risk premium in China equities?

• Decreased government spending

• Higher inflation rates

• Structural reforms and capital market liberalization

• Increased foreign investment

What is driving the current rally in the market according to Goldman Sachs?

• Fear of missing out (FOMO)

• Technological advancements

• Rising commodity prices

• Decreasing unemployment rates

What is the expected impact of the increased inclusion factor in MSCI indices?

• Decrease in market volatility

• Rise in interest rates

• Reduction in trade barriers

• Increase in liquidity in the Asian market

What is a fundamental driver for a constructive outlook for China equities in the next 12 months?

• Reduction in technological innovation

• Increase in domestic consumption

• Decrease in global trade

• More policy stimulus and supportive liquidity environment