China's 4 major investment themes for 2015
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E-mail Xinhua, March 19, 2015
China's 2015 government work report will create ample investment opportunities, with four major themes expected to prevail.
Premier Li Keqiang urged governments at all levels to achieve major work targets and deepen reforms at an executive meeting of the State Council on Wednesday.
A detailed list of major infrastructure projects in railways, roads, energy, information technology and industrial parks will be released together with an implementation plan for the Belt and Road initiatives at the 2015 Boao Forum for Asia later this month.
Analysts say market sentiment will be boosted by investment opportunities in new free trade zones (FTZs), development of the Beijing-Tianjin-Hebei region, state-owned enterprise reform, and Internet-driven industries.
FTZs to boost ports and logistics
Newly approved FTZs in south China's Guangdong Province, eastern Fujian Province and the coastal municipality of Tianjin are likely to go public after the annual parliamentary session.
Analysts say the listings will propel the port and logistics industries in the capital market. On the first trading day after the two sessions, shares related to the two sectors in the FTZs saw large gains across the board.
Northeast Securities analyst Du Changchun recommended more focus on shares related to trade, logistics and industrial park development in the three regions.
Beijing-Tianjin-Hebei development
Detailed guidelines and an agenda for the coordinated development of the Beijing-Tianjin-Hebei region will be unveiled after the two sessions, said Zong Guoying, secretary of Tianjin's Binhai New District, during the meetings.
The guidelines cover the integration of transportation, industry and environmental protection in the region. The agenda will clarify completion targets for each year to ensure coordinated development is basically achieved by 2020.
Analysts say stocks related to infrastructure projects will benefit the most since transportation integration will take the lead, with railroads, highways, aviation and port projects under construction.
Investment opportunities are expected for local industries. Stocks related to steel, power equipment, real estate, transportation and automobiles are benefiting from industrial transfer and upgrades, infrastructure links across the region, and construction.
SOE reform
A series of plans to diversify the ownership of the country's state-owned enterprises (SOEs) will be formulated this year, deputy director of the National Development and Reform Commission (NDRC) Mu Hong said on March 7.
Essence Securities expects a surge of mergers and acquisitions, as well as restructuring among China's SOEs, which is a priority on the country's reform agenda.
"Local governments' direction in reforming SOEs is asset securitization, judging from the pilot programs," a research report from Founder Securities said.
Internet Plus
The "Internet Plus" action plan, which was unveiled in the 2015 government work report, aims to support the integrated development of cloud computing with the Internet of Things, big data and mobile Internet, and to foster the artificial intelligence industry.
The development of the ChiNext board, which tracks China's NASDAQ-style board of growth enterprises, and the New Three board, a national equity exchange platform for non-listed medium and small-sized companies, could drive investment in innovation-related sectors, promoting entrepreneurship and Internet-driven industries.
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