CITIC Securities: Global funds are strongly willing to allocate Chinese assets and three pillars support the market in May
Financial News Agency, May 5th – In a recent report issued by CITIC Securities, it was stated that global funds have shown a strong willingness to allocate assets in China as we enter the month of May. With the financial reporting season coming to an end and the upcoming Politburo meeting setting the tone, market expectations for a U.S. dollar interest rate cut are clear and expectations for reform have begun to strengthen.
Market risk appetite has also increased significantly, leading to a more stable and sustainable market outlook for May. CITIC Securities predicts that A-shares will develop on the three pillars of excellent growth, active themes, and dividend varieties.
Firstly, global funds are displaying a strong preference for Chinese assets, particularly focusing on high-quality growth styles. With fierce competition in the market, it is expected that domestic public equity allocations will also lean towards high-quality growth. The report recommends allocating overseas growth products with high cost performance, including manufacturing leaders and consumer electronics.
Secondly, domestic policies are expected to take advantage of the momentum and avoid any sudden tightening. The report predicts that fiscal, real estate, and structural policies will accelerate as the Third Plenary Session of the Central Committee approaches in July. Investors are advised to pay attention to policy catalytic intensification and consider investing in topics such as low-level economy and AI industrialization.
Lastly, the macroeconomic boom is shifting towards earnings, with the growth rate of A-share net profit continuing to improve. Dividends remain an important aspect of financial reports, with stable free cash flow returns being a key consideration for long-term fund allocation in A-shares.
Overall, CITIC Securities is optimistic about the market outlook for May, with expectations of increased stability and sustainable growth. Investors are advised to focus on high-quality growth assets and dividend varieties to capitalize on the current market conditions.