China Stocks Burst Into Bull Market: 5 Picks
On Feb 25, China stocks officially entered the bull-market territory with major indexes registering record gains. Chinese investors indulged in profit-taking on Feb 26 after registering phenomenal gains. While naysayers expressed doubts over the current rally, optimists think that this minor correction is the ideal entry point for investors.
The major catalyst for Monday’s gains was President Trump’s decision to postpone additional tariffs slated to be levied on $200 billion of Chinese imports starting Mar 1. Further, China’s government is implementing stimulus and undertaking wide ranging reforms to rejuvenate its economy. These factors make it the ideal time to invest in China stocks to capitalize on the ongoing rally.
Shanghai Composite, CSI 300 Enter Bull Market
On Feb 25, the Shanghai Composite gained 5.6%, its best single-day percentage advance since June 2015. At that point, shares had gained 20% from their Jan 3 low, perfectly matching a popular definition of a bull-market. The small-cap Shenzhen Composite added 5.6% while the large-cap CSI 300 increased 6%, also entering the bull-market territory.
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Our Choices
Despite Tuesday’s reverse, China’s equity markets now have the makings of a long-lasting rally. A trade truce on one hand and stimulus and financial reforms on the other provide the perfect ingredients for strong gains over the year. Investors will now find it difficult to ignore stocks from the second-largest economy in the world.
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China Eastern Airlines Corporation Limited
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China Southern Airlines Company Limited
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JinkoSolar Holding Co., Ltd.
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China Unicom (Hong Kong) Limited
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RYB Education, Inc.
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