. . . but we pace ourselves while bargain hunting 3Q15: Bouncing around the bottom first, then moving higher
On 17 April, we called for a correction in the MSCI-China to 72-73 . On 22 June, we noted that the correction was only halfway through . On 28 June, we noted that the correction by then was more than halfway through: A fatherly CSRC; a motherly PBOC . For 3Q15, we see the MSCI-China and CSI-300 bouncing around their respective bottom levels for a few more weeks (July/August) on incremental margin liquidation and likely interim misses, but ultimately ending 3Q15 higher on more positive macro and micro data points, including the following:
- Growth stabilisation in 2H15F, with more infrastructure spending.
- Potentially in-line to better-than-expected corporate guidance in select sectors, including efficiency gains, and product & process innovations.
