Beijing kicks off a top political meeting today that is expected to provide opportunities for market restructuring and capital injection in a slew of industries, namely telecommunications, energy, finance and military, the Hong Kong Economic Journal reported Monday
Leaders are likely to outline policies in favor of private ownership and economic reform at the Fourth Plenum of the 18th Central Committee of the Communist Party of China, the report said.
Analysts are upbeat with the rules and regulations which may soon follow the meeting under theme “rule by the law”.
A set of tax and public finance-related laws could be launched.
These regulations may include laws on consumption tax, resources tax and property tax.
Helen Zhu, managing director and head of China equities at BlackRock Inc., said she expects the new rules to make state-owned enterprises (SOEs) more market-oriented and help trigger a turnaround in loss-making industries.
Energy and telecommunications counters could benefit from market-oriented policies, especially in controlling capital expenditure, Zhu said.
China Overseas Land & Investment Ltd. (00688.HK), China Resources Power Holdings Co. Ltd. (00836.HK), Great Wall Motor Co. Ltd. (02333.HK) are among the top picks of Credit Lyonnais Securities Asia, the report said.
However, Leung Chun-fai, head of investment strategy for Northeast Asia at Standard Chartered Bank (Hong Kong) Ltd. warned that market speculation may prompt a short-term run on counters in environmental protection, medical, technology and sectors related to SOE reform, driving market risks.
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