💵 China's Stock Market Rally Is (Finally) Imminent (Again)

 "We sincerely believe that is on the way"

HSBC Asset Management on the coming catalyst for the world’s cheapest major market - China - to finally rally” pic.twitter.com/10TzTPqier— David Ingles (@DavidInglesTV) June 27, 2023 

 Hu Xijin, the former editor-in-chief of Global Times, said yesterday he opened an equity account and started to invest in the Chinese stock market.

He said he does not have any insider information, and all information he has come from the Internet, Hu claimed in his Weibo post.— CN Wire (@Sino_Market) June 27, 2023 

Alibaba: Hope as a thesis - Downgrading to Market-Perform

The set-up doesn't get much easier than this. We upgraded Alibaba a year ago on the basis that the stock had discounted perpetual low growth, and that reopening would help support growth via better category mix.

Alibaba's shares have traded in a range since — but while they remain cheaply valued, perpetual low growth no longer feels like an aggressive bear case.

Alibaba GMV growth will show improvement in the June quarter, meanwhile merchant feedback has continued to point to anaemic marketing spend intentions.

Quarterly comps get harder from here, which we worry contributes to value trap risk.

Houses are for living in, not for speculation

A depressed Chinese consumer is a very real possibility. And it's one that I think markets will increasingly start to discount once the 'excitement' of Evergrande fades and the layers are peeled away...

“We must unswervingly implement the strategy of expanding domestic demand to effectively deal with external risks and challenges with the stable development of ourselves, as we face a complex and grave foreign environment,”

"Since the employment situation among young people remains severe and the willingness of spending among households remains unstable, the consumption sector may see an uneven recovery this year,"

"We believe that a large-scale issuance of consumption vouchers is feasible to quickly drive growth."

He suggested that consumption vouchers worth 300 billion yuan be distributed to households.

"Such an amount of vouchers will generate an additional 1 trillion yuan in consumption, contributing to a 0.62 percentage point increase in GDP growth,"

China should consider issuing 1.5 trillion yuan (roughly $208 billion USD) annually in special treasury bonds in the form of digital yuan to extend around 1,000 yuan in subsidies to each person in the country

“It’s the most effective way to increase the proportion of household disposable revenue [in the national total income] and improve income distribution,”

“Also, it can help boost the development of the digital yuan.”

Analysts are the Mrs Doyle's who've been asking if China will allow the Yuan to weaken for ages. Now it's starting, everyone's gone quiet...

 #China's state-owned banks were selling dollars in offshore spot FX market on Tue as #CNH approached 7.25 per dollar mark, said traders— YUAN TALKS (@YuanTalks) June 27, 2023 

US Treasury Secretary Janet Yellen plans to visit Beijing in early July for the first high-level economic talks with her new Chinese counterpart, people familiar with the scheduling said.

Her trip was long anticipated but was put off until “the appropriate time,” Yellen said in April. The people discussed the timing and purpose of the trip on condition of anonymity, because the details haven’t been officially announced.

GS: unless exogenous shocks arise that fundamentally derail our investment case for China, we see rather limited downside from current levels and believe the risk of engaging with China now is asymmetrically skewed to the upside.

Macrodesiac: Just don't overstay your welcome