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Investors urged to be more defensive
By Chen Li |
September 28, 2011, Wednesday
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Print Edition
Print Edition
INVESTORS have been urged to be more defensive in the last three months of this year because the slump in the Chinese mainland's stock markets is expected to continue, according to UBS Securities.
The listed companies are also likely to see their growth in earnings decline, Gao Ting, chief China Strategist at UBS Securities, told a press briefing in Shanghai yesterday.
The average earnings growth among A-share stocks last year was around 38.9 percent last year, but it was 25.3 percent in the first quarter of this year and 22.8 percent in the second three months, according to date compiled by the brokerage.
"The trend of sliding earnings has just started," Gao said, who predicted that non-financial firms may report negative growth in earnings in 2012.
He suggested investors pay more attention to the consumer-related sector, which is more likely to have stable growth even as the economy is weakening.
Gao said the growth in the Chinese economy may continue to slow in the fourth quarter of this year and next year, and the government is likely to maintain its monetary tightening stance since inflation will remain high.
UBS has cut its forecast of growth in the world's second biggest economy to 9 percent this year from a previous 9.3 percent and slashed it sharply to 8.3 percent next year from an earlier estimate of 9 percent.
The country's inflation this year may be at 5.2 percent, the brokerage said, leaving the government little room to ease its tightening policies which were aimed at taming prices increases.
The listed companies are also likely to see their growth in earnings decline, Gao Ting, chief China Strategist at UBS Securities, told a press briefing in Shanghai yesterday.
The average earnings growth among A-share stocks last year was around 38.9 percent last year, but it was 25.3 percent in the first quarter of this year and 22.8 percent in the second three months, according to date compiled by the brokerage.
"The trend of sliding earnings has just started," Gao said, who predicted that non-financial firms may report negative growth in earnings in 2012.
He suggested investors pay more attention to the consumer-related sector, which is more likely to have stable growth even as the economy is weakening.
Gao said the growth in the Chinese economy may continue to slow in the fourth quarter of this year and next year, and the government is likely to maintain its monetary tightening stance since inflation will remain high.
UBS has cut its forecast of growth in the world's second biggest economy to 9 percent this year from a previous 9.3 percent and slashed it sharply to 8.3 percent next year from an earlier estimate of 9 percent.
The country's inflation this year may be at 5.2 percent, the brokerage said, leaving the government little room to ease its tightening policies which were aimed at taming prices increases.
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