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BUZZ-A-share rebound to continue; SHCOMP target at 3,750 - CSuisse
October 20, 2015 / 5:22 AM / 2 years ago

BUZZ-A-share rebound to continue; SHCOMP target at 3,750 - CSuisse

** A-share rebound could continue for the next two to three months mainly due to excess liquidity - Credit Suisse

** Sets 2015 Shanghai Composite index target at 3,750 on 5 pct earnings growth and 15x target PE

** Shanghai Composite is up 18.5 pct since Aug. lows

** Liquidity is turning positive due to loosening of the monetary policy, new low of the ten-year treasury bonds yield, decreasing expected return of WMP, stabilised margin finance, PE of the CSI 300/All A-share index decreasing and reduced threat of funds outflow as the yuan rate has stabilised - Credit Suisse

** “13th FYP (Five Year Plan) will be one of the most important investment themes. It is clear that the top officers focus less on GDP growth/employment and more on ‘new economy’,” analyst Li Chen said in a note

** The bank raises weight of broad consumer sectors to 52 pct from 34 pct in model portfolio, reflecting two investment themes - the 13th FYP and excess liquidity

** MSCI China is among the cheapest market in Asia on P/E relative ROE


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