HSI1 17,941.78 -170.85 116.22B
HSCEI1 6,374.66 -47.15 48.01B
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HSBC Research: Too Early to Leave Party Now as History Suggests HSCEI Can Rise for Max. 9 Mths
2024-05-21 10:43:16
Chinese equities' sentiment remains positive, HSBC Global Research issued a research report saying. Policy support, falling interest rates and net buybacks provide further support.

The HSCEI has risen 38% from its January low, and historical data suggests that the rebound could last up to 9 months, with possible gains of up to 60%. It is still too early to leave the party, although still lower profitability may limit the eventual upside.

In China's stock market, buybacks are usually undertaken by companies with a higher ROIC, according to HSBC Global Research. Even firms that do buybacks, many of them also issued new shares.

As a result, net buybacks have been negative in the past and only slightly positive last year. In short, there is still a lot of room for improvement in net returns to shareholders.
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