Chinese consumers more confident and savvy than ever: report

2017-11-27

Nov 20– Nov 24, 2017

Chinese consumers more confident and savvy than ever: report

Chinese consumers are more confident and savvy with regard to their choice of brands and products, according to a report released by global management consulting firm McKinsey and Company. The report was based on a survey of 10,000 consumers aged 18 to 65 across 44 cities and seven rural villages and towns in the country. Around 80 percent of the respondents were confident that their household incomes will increase markedly in the coming five years. The "post-90s" generation is emerging as the next engine of consumption in China, according to the report, and this consumer cohort will account for more than 20 percent of total consumption growth, higher than any other demographic segment. The report also noted the "post-90s" showed better confidence in China's macro-economy and tended to have strong awareness and preferences about brands. Lan Luan, an associate partner in McKinsey China's Consumer and Retail practice, said the "post-90s" generation represents a promising group of consumers that will heavily influence how brands perform in China.

BRICS bank approves $400m loans to India, Russia

The Shanghai-based New Development Bank approved two infrastructure and sustainable development projects in India and Russia with loans of $400 million. The loans will be used to rehabilitate the Indira Gandhi canal system in India and to build a toll transport corridor connecting Ufa city center to the M-5 federal highway in Russia. "The NDB was established to mobilize resources for infrastructure and sustainable development in BRICS and other emerging economies and developing countries, and the two projects approved today are fully in line with the bank's mandate and national development plans of our member countries," said KV Kamath, the NDB President. The NDB was set up with an initial authorized capital of 100 billion dollars after leaders of Brazil, Russia, India, China, and South Africa agreed on its establishment during the 6th BRICS Summit in Fortaleza, Brazil, in 2014. It officially opened in Shanghai in 2015. NDB approved seven projects in 2016 with a total worth of $1.5 billion. The bank said sustainable infrastructure development will be the primary emphasis of the bank's operations in the next five years.

7b yuan of treasury bonds to be issued in HK

China's Ministry of Finance (MOF) said Wednesday that it will issue yuan-denominated treasury bonds worth 7 billion yuan ($1.06 billion) in Hong Kong next week. The bonds will be sold via the bond-tendering platform of Hong Kong's Central Moneymarkets Unit (CMU) to institutional investors, foreign central banks and regional monetary authorities in the week starting Nov 27, said the ministry. This is the second round of yuan-denominated treasury bonds to be issued by the MOF in Hong Kong this year. The treasury bonds will be listed and traded at the Stock Exchange of Hong Kong after the official launch. The MOF started selling yuan-denominated treasury bonds in Hong Kong in September 2009 to boost the region's economy and speed up the expansion of offshore yuan business.

Sector Overviews

Top-and bottom-5 performing CITIC securities sectors of this week

171127-1.png

171127-2.png

Indexes performance (as of Nov 24, 2017)

171127-3.png

Market Outlook

The A-share market saw increased volatilities over the past trading days, with the China volatility index rising from 10.4 on 7 Nov to 16.1 on 23 Nov. The weakness was mainly related to the intense rollout of new financial regulations, although last week's asset management rules came broadly in line and provided a transitional period, it did impact on the investor sentiment and stirred up disputes over short-term market development. 

The increased market volatilities and corrections on 23 Nov were both attributable to short-term factors. we remain positive on the mid-term "slow bulls" in the A-share market. In particular, the correction offers valuable opportunities to lift exposure to the quality value leaders.