Market looks forward to details after China announced 20 measures to boost consumption – Jefferies

 

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The Chinese government has released 20 measures to boost consumption, covering six areas, focusing on regulating and improving the supply side and encouraging consumption through local activities and government incentive.

The government has not announced any direct subsidy policies such as cash subsidies, personal income tax cut or consumption vouchers, and it’s believed the 20 measures may only be a policy framework and the market will look forward to more details on how the measures will be implemented and accelerate consumption, Jefferies said in a note. 

Consumer stocks have rebounded since July 18 with the announcement of several policies to boost consumption, the economy and private enterprises, and the next driver for consumer stocks will be more specific policy announcements in the coming months, and whether these policies will re-accelerate consumption, it said. 

Investors will focus on corporate sales trends during the summer vacation period, as well as performance during the Mid-Autumn Festival and October Golden Week, it added.

The broker’s top sector picks include Anta Sports, New Oriental Education, Jiumaojiu, MINISO Group, Mengniu Dairy and China Resources Beer.