Beijing might deploy some economic stimulus later this year to counter a slowdown in growth, the Hong Kong Economic Journal reported Thursday, citing Desmond Tjiang, managing director and portfolio manager for Greater China and Hong Kong at PineBridge Investments.
Tjiang said reforms and the anti-graft campaign have hit the economy and corporate profits more than expected, leading to a slew of downgrades in estimates.
Expectations of growth on the mainland this year have been cut on average to 7.3 percent from 7.5 percent, while forecasts for profit growth of constituents of the MSCI China Index have been trimmed to 8.4 percent from 9.8 percent.
Tjiang said Premier Li Keqiang has underscored the need for reasonable growth, heralding a shift in Beijing’s policy. If second-half growth is slower than a year earlier it could give the central government cause to give a boost to the economy, he said.
Technology and natural gas companies that serve the real economy, as well as undervalued state-owned enterprises could be winning stock picks.
– Contact us at [email protected]