On Monday, December 9, the Politburo, chaired by Chinese President Xi Jinping, announced its decision to adopt a moderately loose monetary policy stance, signaling the potential for additional economic stimulus measures. These measures could be introduced, particularly during the upcoming China Economic Work Conference (CEWC), scheduled for December 11-12.
Krungsri Securities (KSS) wrote in an analysis research that the announcement is viewed positively by its global macro strategist as it reflects a proactive strategy to prepare for potential economic impacts following Donald Trump’s inauguration on January 20. Currently, China’s economy shows limited progress in recovery, particularly in the real estate sector, which has begun to slow down after a rebound in October. Other sectors have not shown significant recovery either.
Additionally, stimulus measures aimed at enhancing liquidity for local governments have been slow to implement. Based on this, the analysis speculates that further economic stimulus announcements could be made during the upcoming conference.
In terms of investment strategy, the strategist suggests accumulating China Play stocks, with a focus on IVL (TP-Con @ THB28.2) SCC (TP @ THB220) PTTGC (TP @ THB30.0).
Moreover, the analysis has become more positive about the Chinese stock market from an asset allocation perspective. They also recommend an Overweight position, with the following recommended funds through Krungsri and Krungsri iFund:
- KFCSI300-A (CSI300 ETF)
- KFACHINA-A (Active A-Shares)
- KF-CHINA (H-Shares ETF)
- MEGA10CHINA-A (Active H-Shares)
