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One area to generate alpha: Chinese Banks

 




Equities continue to trade within a confined range despite a week filled with announcements and reports. The upcoming earnings announcements could potentially trigger a directional market move.

One area to explore for alpha generation could be Chinese banks. As the property market rebounds from regulatory crackdowns and the government's stimulus takes effect, banks are poised to benefit from a surge in new mortgage activity. Average new home prices in China declined by 0.8% YoY in March 2023, an improvement from the 1.2% drop in February.

Since global markets rebounded in early November 22, three major Chinese banks have yielded an average return of approx +24%, outperforming the S&P 500's +11% gain, when measured in USD terms. And dividend yields average at 8%p.a..

Headlines for Week Ahead:
Corporate Earnings (banks, Netflix, LVS) 
China 1Q23 GDP
SG Mar NODX


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