New | China shares expected to continue rebound this week on stimulus hopes

After a sharp rebound in the first week of the Year of the Monkey, mainland China markets are expected to continue their upward trend in the next couple of weeks, amid expectations that authorities will keep monetary policy loose or roll out further stimulus to stabilise the economy ahead of the upcoming National People’s Congress meeting in early March, analysts say.

In addition, the appointment of a new chief of the China Securities Regulatory Commission is also likely to be welcomed by the markets. .

On Saturday, a brief statement by Xinhua said Liu Shiyu, the head of the Agricultural Bank of China, would take over as head of the CSRC, replacing Xiao Gang.

Ricky Tam Siu-hing, chairman of Hong Kong Institute of Investors, believes investors will react positively to Liu’s appointment to the CSRC, because among other changes, there’s likely to a slowing in the pace of new share listings on mainland markets.

Mainland stocks rallied strongly in the first trading week of the Year of Monkey, tracking a rebound in global markets and commodity prices. The Shanghai Composite Index finished 3.5 per cent higher, marking the best week in two months and trimming the losses since the start of the year to 19 per cent.

Analysts said mainland stocks may gain further ground in coming weeks amid growing expectations that more stimulus measures could come out before the NPC meeting on March 5.