The worst may be over for Chinese stocks after three straight years of losses dealt a US$1.4 trillion wipeout, as a recovery in corporate earnings takes hold amid a ramp-up in policy support in the world’s second largest economy, according to Swiss bank UBS Group.
An uptick in profits for industrial companies, which largely move in tandem with earnings for Chinese domestic listed companies, is probably a signal that the gloom is lifting, Meng Lei, a UBS strategist, said at the banks annual Greater China conference in Shanghai on Monday. Policymakers could bail out cash-strapped developers, and homebuyers could respond positively to mortgage rate cuts, he said, adding there is room for cuts in interest rates and the reserve requirement ratio this year.
Profits for industrial companies surged 29.5 per cent from a year earlier in November, posting growth for a fourth consecutive month after reversing declines in August, data from the…
