Manufacturers like those making refrigerators could offer value in weak China market
Manufacturing companies, including those making whitegoods such as aircon and refrigerators, may offer investment value in a weak Chinese market, according to William Ma, Grow Investment Group, chief investment officer.
"These companies will benefit from tax reduction, tax cuts ... they have the highest possibility for an earnings upgrade especially if commodity prices come down," Ma told CNBC's "Street Signs Asia" on Friday.
Those making whitegoods will benefit from more retail spending driven by government-issued spending coupons. Many of them are trading at a reasonable valuation, he added.
"I believe whitegoods and refrigerators will benefit from this round of stimulus," Ma said.
As for the tech sector, Ma noted many stocks will be re-rated, as the "high growth era is gone" and it won't be until 2023 or 2024 that they will again be re-rated in a "high way".
— Su-Lin Tan
China GDP growth lethargy in motion, says economist
Capital Economics senior China economist Julian Evans-Pritchard said in a note on Thursday that prospects of a post-Omicron rebound for China were poor, especially against a backdrop of a spiraling housing market and slow credit appetite despite policy easing.
"More support is on its way but it will probably be too late too little to prevent output from stagnating this year. And once the economy does return to growth, it will be at a slower pace than in the past," he said.
China's current economic problems would worsen if not for exports that have boomed lately, Evans-Pritchard said.
But there are signs that demand is now dropping due to a global economic slowdown and a reversal in the pandemic-induced shift toward goods consumption, he added.
The Chinese central bank surprised this week with a 10 basis point cut to its key interest rate on Monday.
"We now expect two more 10 basis points cuts over the remainder of this year and continue to forecast a RRR cut next quarter. These moves will be largely symbolic, however," Evans-Pritchard said.
"The PBOC wants to reassure market participants and its political bosses in Zhongnanhai that it is taking action to shore up the economy. But in practice, the central bank still appears reluctant to slash rates on the scale needed to make a meaningful difference to loan demand," he added.
— Su-Lin Tan
CNBC Pro: Investment pro says 'don't be a hero' in markets
Market veteran Nancy Tengler says talk of a new bull market is premature, as she names the "reliable" stocks she likes right now.
"I think this rally has been excellent," Tengler, who is CEO and chief investment officer of Laffer Tengler Investments, told CNBC "Squawk Box Asia" last week. "But I don't think we're off and running in a new bull market."
She named several tech stocks that she thinks are "more reliable growers" — companies with a proven track record of growing earnings and dividends.
Pro subscribers can read the story here.
— Zavier Ong
CNBC Pro: Veteran strategist David Roche shares his views on the market rally
U.S. markets have picked up from their mid-June lows in recent weeks, but strategist David Roche believes current support for the market is set to run out.
Speaking to CNBC earlier this week, Roche, head of research firm Independent Strategy, said he thought the rally was "probably 75% over now."
Pro subscribers can read more here.
— Jenni Reid
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August 19, 2022 at 09:46AM
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