HSBC Recommends Avoiding China Stocks Until Second Half 2011
This article is for subscribers only.
HSBC Holdings Plc recommended investors avoid China’s stocks until at least June because the government will announce more policy measures to cool inflation.
“We wouldn’t advise buying equities until we’re clear of signs of inflationary pressure and that probably won’t happen until the second half,” Garry Evans, a strategist at HSBC in Hong Kong, said in a Feb. 18 phone interview after the central bank ordered lenders to set aside more money as reserves for the second time this year. “We have been pretty cautious on Chinese equities for a year now and we still think there is a risk of more increases in reserve requirements and interest rates.”