China stocks rise as top brokerages Citic, CSC and Everbright predict swift economic recovery from Covid impact

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China stocks rise as top brokerages Citic, CSC and Everbright predict swift economic recovery from Covid impact​

• With markets in Hong Kong and Japan closed for the Christmas break, China’s onshore stocks lead gains in Asia
• Crowds throng malls, restaurants and cinemas in Beijing over the weekend to celebrate Christmas as many people recover from Covid-19 infection, reports say
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• Figures from China’s stock markets are seen on a pedestrian bridge in the Lujiazui financial district in Shanghai. China appears to be seeing an increase in Covid cases across the country. Photo: Bloomberg
  

Chinese stocks rose as bullish calls by major brokerages bolstered expectations that the impact of surging infections on the economy would be short-lived. Onshore stocks led gains in Asia where most markets are closed for the Christmas break.
The Shanghai Composite Index climbed 0.7 per cent to 3,067.54 in the morning session, rebounding from a weekly loss. The CSI 300 Index added 0.5 per cent, while the tech-dominated Shenzhen Component Index advanced 1.1 per cent.
While Asian markets such as Hong Kong and Japan are closed, those open on Monday were mixed. South Korea’s Kospi rose 0.1 per cent and Taiwan’s Taiex index lost 0.1 per cent.
Citic Securities, the nation’s biggest publicly traded brokerage, CSC Financial and Everbright Securities, all issued reports saying that 2023 would be brighter for Chinese stocks, citing economic recovery, attractive valuations and an uptick in risk appetite.
The calls are likely to reinforce expectations among investors that the damage from recent surge in Covid cases, which are ravaging megacities from Beijing to Shanghai, will be largely one-off.
Some of the people who have recovered from Covid returned to major shopping malls in Beijing to celebrate Christmas over the weekend, queuing outside restaurants and cinemas, according to local media.

“In the short term, the market may still remain volatile,” said Liao Jingchi, an analyst at Guotai Junan Securities. “But in the long run, the current level offers a good buying opportunity and investors can buy into financial and consumer names that are set to benefit from the economic recovery.”

People take photos at a business area on Christmas eve in Guangzhou, in China’s southern Guangdong province. Photo: AFP
Shanghai, which is battling a surge in infections, unveiled measures over the weekend to ease labour shortages to keep the city of 25 million afloat.
Couriers working for major delivery platforms will be given a subsidy of 60 yuan (US$8.6) per day until January 27 and workers for major infrastructure projects will receive 100 yuan, the municipal government said. Non-local workers are encouraged to stay in the city for the Lunar New Year holiday next month, when they will get free tickets for films and amusement parks, it said.

New-energy stocks were among the biggest gainers. Sungrow Power Supply, which makes solar power inverters, jumped 9 per cent to 99.80 yuan, while Trina Solar climbed 8.6 per cent to 58.50 yuan.

Three companies debuted on Monday, all of which dropped. SWS Hemodialysis Care slumped 18 per cent to 26.47 yuan in Shanghai, Zhejiang Zuch Technology lost 17 per cent to 55.82 yuan in Shenzhen and Chengdu Rich Technology sank 15 per cent to 6.75 yuan in Beijing.

China stocks rise as brokerages predict swift economic recovery from Covid surge

Citic Securities, CSC Financial and Everbright Securities expect a bullish year for Chinese stocks in 2023, citing economic recovery, attractive valuations and an uptick in risk appetite.

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