EQUITY MARKET SHOWS SIGNS OF RECOVERY
Opportunities of earning handsome return from medium and long-term investment in Chinese equities are expected to shine in ashes of the recent global financial turmoil, analysts said.
Since late February, worldwide stock assets have seen their market value slashed amid concerns over an economic downturn due to the global novel coronavirus pandemic.
Plunges on Wall Street have sent the Dow Jones Industrial Average to a worst-ever first-quarter decline of 23.2 percent.
China's key Shanghai Composite Index held its poise through the market jitters but has still fallen 9.38 percent since the beginning of the year, closing at 2,763.99 on Friday. The ChiNext index, tracking Shenzhen's innovative startup-heavy board, has shed 16.86 percent since its high in late February.
"There has been a crisis of confidence lately. Investor focus has shifted toward assessing the worst-case outlook for equities," according to Japanese brokerage Nomura.
This, however, may have implied undervaluation and hence upside potential for the medium term, or the next six to 12 months, Nomura said.
It added that equity markets may find some stability during the first-quarter reporting season, which starts mid-April and lasts through May, upon signs of a tapering in new infection cases in the United States.
China's A-share market may stand out in the possible stock market recoveries, analysts said, as China's economic recovery ahead of the world and higher interest rate level may attract global capital to boost holdings in Chinese equities.
The trend of capital inflow may have started. Stock connections between mainland and Hong Kong bourses registered a net foreign inflow of 8.15 billion yuan ($1.15 billion) over the past week, reversing a substantial outflow last month amid the global liquidity strain, according to market tracker Wind Info.
"The A-share market may now be at a critical bottom area for the coming year," said Zhang Xia, chief strategist with Shenzhen-based China Merchants Securities.
Long-term allocation in China's A-share assets is also appealing, said Chen Wenyu, deputy general manager with fund management joint venture Invesco Great Wall Fund Management.
"When low profitability and low valuation coexist in economic transformation, I believe there is value in equities. Holding them for long-term gain will be worthwhile," Chen said.
Among all A-shares, growth companies engaging in technology and consumption upgrades will remain the key investment target pool. Further, value stocks with stable profitability, high dividend and low valuation will likely fare well in the worldwide low interest rate environment, Chen said.
Analysts, though, cautioned about the risks to the above forecasts, such as a possible lingering of the global pandemic, weaker-than-expected economic recovery and an outflow of foreign capital upon central banks' future exits from aggressive monetary easing.
Downside risks still abound in global stock markets, and volatility may take weeks or months to wane, in light of market performances during previous crisis events, said Zhu Haoyuan, head of Asia Pacific analytics at US-based investment research firm MSCI.
CHINA REMAINS VIGILANT FOR NEW CASES
The National Health Commission reported 30 new confirmed cases on the Chinese mainland, including five locally transmitted cases, and 47 new asymptomatic infections on Saturday, as efforts to curtail a second wave of infections have intensified nationwide.
All of the five domestic infections were detected in the southern province of Guangdong, and they contracted the virus from people who had been infected from outside of the country, according to the provincial government of Guangdong.
Wang Bin, a senior official at the National Health Commission's disease prevention and control bureau, said last week that such cases were often close-contacts of imported infections who transmit the virus to others during transit or self-isolation at home.
The remaining 25 confirmed cases involved travelers from abroad, up from 18 imported cases the previous day and bringing the total number of infections entering from overseas to 913 as of Saturday, commission data shows.
To stamp out the risk of infected inbound travelers, local governments across the country have stepped up monitoring of incoming passengers and imposed centralized medical observation on all of them.
Of the 47 new asymptomatic individuals−people who are infected but show no symptoms−16 were travelers from abroad, according to the commission. As of Saturday, 1,024 symptom-free patients were under medical observation nationwide, with about two-thirds of them in Hubei province, the hardest-hit region in China.
To fend off new outbreaks, Wang Chen, president of the Chinese Academy of Medical Sciences, has called for science-based, prompt and refined epidemiological research that can supplement essential knowledge about the virus.
"In severely stricken areas, nucleic acid testing can help identify undetected asymptomatic cases and antibody tests will reveal the overall immunity levels of the population," he told People's Daily on Saturday.
Wu Zunyou, chief epidemiologist at the Chinese Center for Disease Control and Prevention, said earlier that confirmed cases associated with asymptomatic infections account for less than 5 percent of all infections, citing a study conducted by the disease control center in Ningbo, Zhejiang province.
"Swift detection and control of asymptomatic infections will reduce their risks of triggering another outbreak to the minimum, and wide spread of the virus is unlikely," he said.
Even though the asymptomatic group is believed to be small and unable to cause widespread transmission, authorities are implementing strict screening and quarantine measures for them.
The National Health Commission started to report the number of asymptomatic cases as a separate category in its daily briefings on April 1, and it has stressed several times that the reporting and investigation of asymptomatic cases, and management of their close contacts, should be consistent with that of confirmed infections, including 14 days of centralized quarantine and multiple nucleic acid tests before release.
Pushing beyond the national requirement, Hainan and Zhejiang provinces have recently decided to extend the isolation period−adding 14 more days of quarantine at designated facilities following 14 days at hospitals−for asymptomatic cases, according to provincial health authorities.
Fujian province announced last week that asymptomatic individuals will undergo 14-day self-isolation and monitoring of health status after completing the first round of quarantine, and that they are required to visit hospitals for checkups at the second and fourth week after being discharged, Fujian Daily reported.
NATION TO BOOST GLOBAL MEDICAL SUPPLIES
The Chinese government will ramp up efforts from various departments to accelerate the process of exporting crucial medical supplies to the world, while strictly controlling product quality, a government official said on Sunday.
Zhang Qi, deputy director of the Department of Medical Device Regulation of the National Medical Products Administration, said at a news conference that together with other concerning government units, the department will further enhance the quality supervision of the medical equipment related to pandemic prevention and control.
As COVID-19 quickly spreads across the world, the global community is facing a shortage of medical supplies. China's supervision departments and domestic medical equipment manufacturers are working around the clock to offer as much quality medical goods as possible to ensure a stable global supply.
Since April 1, exporters of medical products including COVID-19 testing kits, medical face masks, medical protective suits, ventilators and infrared thermometers have to provide extra documentation when these goods go through customs. Customs authorities release the exports based on a registration certificate approved by medical product administrations, according to the Ministry of Commerce.
Zhang said that the National Medical Products Administration has taken measures to ensure the quality of exported supplies, including throughout the raw material procurement, production control and product release processes.
Violations of laws and regulations would be severely dealt with, she said.
Speaking of recent media reports on China exporting problematic masks to certain countries, Jiang Fan, an official with the MOC's foreign trade department, said those reports did not objectively reflect the truth.
"There are differences between quality standards in different countries or regions, and also between usage methods, plus some quality doubts are results of improper usage," Jiang said.
Despite the ongoing battle with the outbreak in China, the Ministry of Commerce said China has not and never would restrict the export of medical supplies and will continue to provide the supplies it has to help other nations fight the virus.
According to the ministry, as of Saturday, 54 countries and three international organizations have signed medical procurement contracts with Chinese enterprises, and more agreements are expected to be signed with another 74 nations and 10 international organizations in the near future.
MORE DISTRICTS IN WUHAN CLASSIFIED AS LOW-RISK AREA OF COVID-19 OUTBREAK
One more district in Wuhan, the hardest-hit city by novel coronavirus disease (COVID-19) outbreak, has been classified as a low-risk area of the virus outbreak, according to the provincial COVID-19 epidemic prevention and control headquarters Saturday.
This brought the number of low-risk districts in Wuhan to nine, out of its total 13 districts, as of Friday. Four other districts are classified as medium-risk areas, according to the headquarters.
Wuhan had its coronavirus risk evaluation downgraded from "high risk" to "medium risk" on March 27.
Hubei Province that administers Wuhan remains to have no "high-risk" cities or counties.
On Friday, Hubei Province reported one new COVID-19 case and saw four new deaths, which were all reported in Wuhan.
According to the risk criteria defined in a guideline issued by China's State Council, cities, counties and districts with no newly confirmed cases in the last 14 days are categorized as low-risk areas, those with fewer than 50 cases or those with over 50 but without a concentrated outbreak are classified as mid-risk areas, and those with over 50 cases as well as a concentrated outbreak are classified as high-risk areas.
MEDICAL SUPPORT ON ITS WAY TO THE PHILIPPINES
At the invitation of the Philippine government, a group of 12 medical experts set off to the southeast Asian country on Sunday from Fuzhou, capital of East China's Fujian province, to aid the country’s campaign in the fight against on the ongoing COVID-19 pandemic.
The team is composed of seasoned experts from Fujian Provincial Hospital, Fujian Provincial Center for Disease Control and Prevention, the First Affiliated Hospital of Fujian Medical University and People's Hospital affiliated to Fujian University of Traditional Chinese Medicine.
They are experts in respiratory disease, intensive care units, traditional Chinese medicine, Chinese and Western Integrative Medicine, infectious epidemic control, microbiological testing and medical care.
They also brought urgent medical materials and equipment, including 30 ventilators, 5,000 sets of medical protective suits, 30,000 N95 facial masks, 300,000 medical facial masks and 5,000 medical facial shields, which were donated by the Fujian provincial government.
In addition, some organizations, like the Overseas Chinese Charity Foundation of China and the Association of Fujian Overseas Friendship Association, as well as some local enterprises, donated up to 12 tons of medical materials, equipment and traditional Chinese medicines to the Philippine government.
EPIDEMIC UNLIKELY TO HURT SOYBEAN IMPORT, MINISTRY SAYS
China's soybean imports haven't been affected by the spread of COVID-19 globally and the soybean production is expected to increase in major soybean exporting countries, officials with the Ministry of Agriculture and Rural Affairs said at a briefing on Saturday.
The soybean production and demand gap in China is large, according to Pan Wenbo, head of the ministry's crop production department.
As the largest import of agricultural product, soybean is mainly used for oil extraction and soybean meal feeds in China, said Wei Baigang, head of the ministry' department of development and planning.
Last year, China imported 88.51 million metric tons of soybean, 85 percent of the domestic consumption. Among the importation, those from Brazil, the United States and Argentina accounted for 65, 19 and 10 percent, respectively, he said.
In January and February, the soybean import was 13.51 million tons, up 14.2 percent year-on-year, he added.
"At present, the import of soybean to China has not been affected by the outbreak," said Wei, adding that the import volume of Brazilian soybean to China increased last month.
Brazilian soyabeans are now in the harvest season and the production this year is expected to increase, possibly to around 121 million tonnes, with exports also projected to rise, he said.
Most of the exports of soybean production in Brazil come to China. Brazilian farmers and the government are taking measures to ensure the production exported timely, he added.
In late April, the soybean farming in the US will enter the sowing period, and it is expected that the intended planting area of soybeans will increase, according to Wei.
China and the US have implemented the first stage of economic and trade agreement reached at the beginning of the year, so the soybean imports from the US may increase this year, he said.
The COVID-19 is still spreading and Brazil, Argentina and the US are the countries with severe epidemic. The ministry will pay close attention to the impact of the epidemic on China's soybean imports together with relevant departments, Wei said.
The ministry will continue to promote the soybean production in China to increase domestic supply, he said.
Pan said in recent years the area under cultivation of soybean has continued to increase. Soybean acreage reached 9.33 million hectares last year, a high level since 2005, but imports are still needed to make up the domestic shortfall, he said.
THOUGHT FOR THE DAY
Nothing great was ever achieved without enthusiasm. - Ralph Waldo Emerson