By Chua Kong Ho
Dec. 8 (Bloomberg) -- China’s stock markets have probably “bottomed” as the slowdown in economic growth reaches its trough this quarter, according to JPMorgan Chase & Co.
The benchmark CSI 300 Index has advanced 24 percent in the past month, the best-performer among 90 benchmarks tracked by Bloomberg, paring the year’s drop to 62 percent as the global economy sank into a recession. The rebound coincided with the announcement of a 4 trillion yuan ($581 billion) spending package last month and the biggest cut in interest rates in 11 years.
“We have had a nice bounce for the A share market and we have probably seen the bottom,” said Frank Gong, China strategist at JPMorgan told reporters in Shanghai today. China stocks traded in Shanghai and Shenzhen are listed as A shares, those traded in Hong Kong are H shares. “The worst in economic news flow is probably over.”
Gong and his team were top-ranked for China research in Institutional Investor’s 2008 investor survey.
China’s economy will probably grow 2 percent this quarter, compared with the prior three months, with full-year growth in 2009 at 8 percent, Gong said. He favors cement, infrastructure- related stocks and banks among those that will benefit from the fiscal stimulus package.
To contact the reporter responsible for this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net
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