Salient to Investors:
Victoria Mio at Robeco Hong Kong said China’s leadership change removes the biggest overhang for the nation’s equities as the new government is determined to carry out reforms. Mio said implications on the economy are neutral near term as China is expected to maintain the current monetary and fiscal policies.
Barclays said China’s new leaders will be more tolerant towards new normal lower rates of growth as the days of massive stimulus are probably over. Bloomberg estimates China will grow 7.7 percent in 2012, the slowest since 1999.
John Woods at Citigroup is cautious on Chinese stocks given policy uncertainty in China and global turmoil including the fiscal cliff. Woods said Chinese stocks valuations are cheap and may get cheaper.