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14 Apr 2015
China Shanghai index rally up 23% this month - BBH
FXStreet (Guatemala) - Analysts at Brown Brothers Harriman explained that, in China, the rally has been mainly in equity markets, with the Shanghai index up 23% this month.
Key Quotes:
"We think the risk-reward doesn’t look so favorable in the short term, as a sizable correction is bound to happen sooner or later. Still, we think the broad drivers for the rally will remain in place for the time being. The government will continue to implicitly back the rally via measured stimulus."
"Since we are still in the process of deflating the shadow banking system (LGFV, trusts, etc.), some of that money will find its way into stocks. We don’t expect any great excitement from the currency, with small range bound moves seen instead of longer trends."
Key Quotes:
"We think the risk-reward doesn’t look so favorable in the short term, as a sizable correction is bound to happen sooner or later. Still, we think the broad drivers for the rally will remain in place for the time being. The government will continue to implicitly back the rally via measured stimulus."
"Since we are still in the process of deflating the shadow banking system (LGFV, trusts, etc.), some of that money will find its way into stocks. We don’t expect any great excitement from the currency, with small range bound moves seen instead of longer trends."