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Market review: July 15, 2016

Fang submitted 2016-07-15 16:58:28

Market review:

China stocks stayed firm with better than expected GDP and other macro data for June. GDP for Q2 grown 6.7% on year, beat the 6.6% expectation. New loan and social finance figure are also higher than the expectation by a wide margin.


Research Notes:

Money flowed into Wine Brewing, Plastics and Banking sectors the most. Hainan Automobile Co.(603069.sh), rallied to limit-up for the third time in a row as investors chasing this newly-listed stock.

The better than expected macro data reading push CNYUSD to 6.79 level but we believe the easy monetary policy can’t support the rebound of RMB for long. DXY declined for the fourth day and it supported the rally of most commodities. Majority of commodity futures in China market rallied with palm oil and rubber took the lead with production of the both be affected by prolonged drought in South East Asia, with the gap between production 2015 and 2016 getting wider by month into June. We hold our idea that SHA could reach 3100, driven by better than expected econ data, the supportive monetary policy and seasonality of bullrun into October, but investors should also be cautious about some set back in August and September, which itself could provide some opportunity to reload and relocate the shares.


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