Regulatory headwinds not to end growth trajectory of China’s massive economy – DBS Bank

China’s series of policy announcements over past weeks sent the market on a sharp fall. However. China’s regulatory initiatives are meant to strengthen, and not derail, the long-term development of its economic foundation and important sectors, as reported by Yeang Cheng Ling, Strategist at DBS Bank.

Valuations have become attractive

“With earnings expectations reset and compelling growth at a reasonable price, investors can stay invested in sectors and stocks that demonstrate long-term potential.” 

“We remain constructive on China's large cap Internet, e-Commerce, insurance, and semiconductor sectors. Their fundamentals will continue to support the long-term outlook and recovery.”

“We reaffirm our positive stance on China financials, primarily on the insurance sector which will continue to benefit from low penetration rate and increasing acceptance by the middle income and millennial populations and large state-owned banks which have demonstrated their ability and commitment to sustain their dividends.” 

“We continue to favour China A-share markets which are populated with sectors and firms that will benefit from local economic development.”