The Chinese economy is in paralysis due to Coronavirus, but some investors are still betting on a comeback for Chinese companies. Hong Kong’s Send index and Shanghai composite might due to a comeback even if they are both down this year. This is the right time for investors to buy Chinese stocks since the prices are low. Later on, they will sell them at high prices. As the disease spreads to other countries, Chinese stocks might be close to bottoming out.
China and other emerging markets are expected to be more attractive within 5 to 10 years. It has also been indicated that Chinese stocks have started to awaken. There are those Chinese firms that have maintained performance during the Coronavirus outbreak. These include Alibaba and Baidu and Ten cents.
Additionally, the companies are better bargains than some of the high-tech US companies like Amazon and Netflix. Some homegrown Chinese drug makers may experience a boost during this period. China had started to experience a biotech boom just before the outbreak of the Coronavirus.
Chinese government officials aim to upgrade the economy to sectors like pharmaceuticals and not just to focus on generic drugs. The Chinese stocks may experience a boom since the People’s Bank of China is doing all it can to make sure that the economy does not slow down more dramatically.
Stimulation of the economy is being done by central bankers to make sure that stocks do better in the future. During the first quarter, the numbers coming out of China may not be very appealing, but that will make the Chinese officials act more aggressively.
Conclusion
This is the best time to buy Chinese stocks since the prices are low. In the future, the prices of shares will rise, and those who will buy now will sell them at high prices. The coronavirus outbreak in Wuhan has affected the Chinese economy severely, including the stock market. However, the stock prices are expected to rise since the economy has started awakening. The people’s Bank of China and the central bank are doing all they can to restore the situation.
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