Main reference: Story in Morning Express
THE RANGE provided by 15 brokerages looking at the Chinese stock market is that the benchmark index will range between 1,700 and 2,750 points next year.
That offers more good news than bad because it’s currently hovering just above 2,000.
China’s 20-year old A-shares, whether traded in Shanghai or Shenzhen, were shunned by both local and offshore investors for most of what has been a very uninspiring Year of the Dragon.
But for those investors looking forward to shooing away the very bearish dragon, many market watchers are saying the Year of the Snake -- which begins on February 10, 2013 -- will usher in a decidedly more bullish year.
Already 15 research houses have given their takes on China’s equity markets in 2013
And we all that that getting rivaling brokerages to agree on anything is much akin to herding cats, they all do generally expect a bull run of varying durations and robustness in the first quarter next year.
But the over dozen houses polled do show a good deal of disparity in terms of the extent to which they think the benchmark Shanghai Composite Index might rise, or dip, in 2013.
The most optimistic forecasts see the Index rising to as high at 2,750 points next year, which would represent a stunning 32% rise from Monday’s close of 2,084.
Meanwhile, the naysayers see the Shanghai Composite hitting a rut as low as 1,700 points next year, which would mean a dropoff of just over 18% from current levels.
That makes the high estimate of 32% a full 14 percentage points more optimistic than the low guess of and 18% fall in the Index for 2013.
Therefore, the smilers outnumbering the frowners among this not insignificant sampling pool should put a bit more spring in the steps of investors as far as bourse sentiment is concerned for the coming year, which is already knocking at the door.
Most of those houses with bullish takes on the coming year cite the improving Chinese economy, stronger credit inflows and a relatively pro-growth policy stance taken by the just-completed once-a-decade leadership transition in Beijing.
And in the interests of full disclosure, investors are probably wondering which houses are the contrarians out there?
Five of the 15 brokerages tallied said they expect A-shares to retreat even further from current levels, despite the lost year that was 2012.
Guotai Junan expects the Shanghai Composite Index to range between 1,900 and 2,400 next year; Sinolink Securities (1,800-2,150); Northeast Securities (1,850-2,450), Shanghai Securities (1,900-2,400) and last but not least – Central China Securities – which is the most bearish of bourses, expecting the Index to slump to as low as 1,700 points next year at some time.
Some of the more bullish bourses out there, as least as far as 2013 share prices in China are concerned, include China International Capital, Shenyin Wanguo, Goldman Sachs Gao Hua Securities, Huatai Securities, Guangfa Securities and Haitong Securities.
Haitong listed in Hong Kong in May of this year, raising 1.7 billion usd in the process and making it the world’s biggest IPO in the first half of 2012.
But as only five of the brokerages polled were willing to give range forecasts for the benchmark Index next year – far fewer than volunteered in years past – this further reveals the turbulent and murky investing climate in which we all buy, sell and hold.
Despite the lack of commitment on most respondents in terms of exactly how high and low they think the market might end up next year, investors should be encouraged by the majority upbeat forecasts for 2013.
Perhaps this can be the spark that ignites a wildfire of optimism, however short lived.
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