With the Covid-19 pandemic, China equities, as well as the overall Chinese economy, have taken a significant blow. China’s market share was very much volatile in the first quarter of the coronavirus outbreak. Declining domestic consumption and external demand put significant pressure on corporate fundamentals. The significant Wuhan lockdown caused dips in economic activity, due to delays in work transitions and strict social distancing measures.
Despite being the first epicenter of the COVID-19 outbreak, China was also the first country to see a recovery from the economic downturn. As of 24th April, China has reported less than 100 imported cases nationwide over the past 34 days, and most of the new cases were imported from other countries. In contrast, Europe and America have become the new fuel houses of the Covid-19 pandemic, as the number of confirmed cases continues to surge in these parts of the world.
Here are some reasons why we may see great performance from China equities in the near future....