Since mid-June, the value of domestic Chinese equity has plunged by more than 30%. However, before this, the market had surged by 160% since its low in January 2014. Unlike the preceding bull market in 2005-2007, the latest boom played out against a backdrop of a significant slowdown in GDP growth.
Strategy and Economic Research at Amundi
We think the Chinese economy is bottoming in the near term, at least over the next few quarters. Bottoming can be said to be taking place when there is marginal improvement, or when the economy is simply stabilising around the current level with no further deterioration, and bottoming can also take place within a narrow range.
Amundi Hong Kong Chief Economist
Letter finalised at 3pm Paris time Greece: the country’s fate should be decided this weekend. / World: The IMF forecasts a slight downturn in global economic growth this year. / Eurozone: Major national institutions foresee a slight acceleration in the recovery. / United States: Encouraging services and job market figures. / Markets: The movements in developed rates remain relatively contained. The dollar rose against the euro but de-clined against the yen. Greece and China are still maintaining a climate of great caution on the equity markets.
Global Head of Research, Strategy and Analysis at Amundi