Hi Investment & Securities "Focusing on China's Mainland Stock Market Plunged Due to COVID-19"
[Asia Economy Reporter Park Jihwan] Hi Investment & Securities announced on the 27th that it recommends the 'KB China Mainland A-Share Fund,' which invests in the Chinese mainland stock market that has recently plummeted due to the spread of the novel coronavirus infection (COVID-19).
This fund mainly invests in Chinese mainland A-shares listed on the Shanghai and Shenzhen stock exchanges (including upcoming IPOs). It is characterized as a multi-manager fund operated in collaboration with local asset management companies. Established in March 2011, the fund manages approximately 445 billion KRW, with a one-year return of 14.4% and a cumulative return of 68.1% since inception.
Hi Investment & Securities is focusing on the Chinese market because it expects the market pattern, which had been rising mainly in developed countries until last year, to change going forward. In particular, there are investment opportunities in emerging countries, and among them, China, which experienced a difficult period last year due to the US-China trade war, is worth attention, according to Hi Investment & Securities' analysis.
Regarding temporary adverse factors like COVID-19, as time passes, the market recovers its fundamentals, so now is the right time to invest. The Shanghai Composite Index, which had risen above the 3,000 level at the end of last year due to the effect of the Phase 1 small deal agreement, has fallen more than 8%.
China's government stimulus measures are also a positive signal. On the 7th, the Chinese government announced that it would apply preferential corporate tax rates to industries such as transportation, accommodation, travel, and aviation to prevent consumption contraction caused by COVID-19. It is also considering lowering the reserve requirement ratio to expand liquidity supply.
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The KB China Mainland A-Share Fund (equity), recommended by Hi Investment & Securities, has a risk rating of level 2 and is suitable for investors with an aggressive investment tendency or higher. A Hi Investment & Securities official emphasized, "Now is the time for China to implement stimulus measures, and it is the right time to pay attention to bottom-fishing in the Chinese mainland stock market."
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