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Traders count on China’s ‘two sessions’ to reverse stock market decline as delegates set to endorse policy loosening to spur growth

  • Beijing will make stabilising growth the top priority at the upcoming NPC and CPPCC gatherings, investment banks predict
  • Money managers see opportunities in property developers, household appliance makers and financial firms, which stand to benefit from pro-growth measures

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The NPC and the CPPCC will be in the spotlight at a time when the pressure on a slowdown in growth is building up. Photo: Xinhua
Zhang Shidong
After a brutal start to the year, traders are pinning their hopes of a turnaround in Chinese stocks on top policymakers, who will gather in Beijing this week for the annual legislative and consultative conferences that set in motion economic policies and growth targets.

The National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) will be in the spotlight at a time when the pressure on a slowdown in growth is building up and the government’s efforts to bolster the economy have so far failed to buoy share prices.

Beijing will put stabilising growth at the top of its agenda at the upcoming gatherings, according to investment banks from ING to Sealand Securities and China Galaxy Securities. Union Bancaire Privée (UBP) predicts that China’s central bank will further loosen monetary policies by extending cuts in borrowing costs.

Money managers including HFT Investment Management see opportunities in property developers, household appliance makers and financial names, which stand to benefit from pro-growth measures.

Historical data is marginally in favour of stock traders during the two sessions period. The Shanghai Composite rose by an average 0.01 per cent throughout the NPC and CPPCC meetings since 2000, excluding a 16 per cent slump in 2008 amid the global financial crisis, according to data compiled by the Post.

Two weeks after the meeting, the index has posted an average gain of 1.5 per cent, the data shows.

The CPPCC, which advises the government on major policies, kicks off on Friday, while the NPC, the nation’s top legislative body, is due to start its meeting the following day.

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