Trading Themes Prospects in 2021

 

After the volatility witnessed in 2020, we can say that 2021 is both the continuation of the old market environment and the start of a new one. As we enter the post-pandemic era, the market will usher in changes triggered by countries bringing the coronavirus pandemic under control and the resulting economic recovery. It is highly likely that volatility will not change and is inevitable, but we can explore the opportunities arising from this and look forward to the top ten trading themes of 2021.

 

3 Major A-share Indexes rise can be expected 

 

The A-shares performance in 2020 can be regarded as being very successful. The three major mainland indices all gained over 10% during the year, continuing the upward trend seen in 2019. In line with the more positive domestic and foreign environment, market participants as a whole are regarded as being neutral or optimistic about 2021. So, we can expect that stock prices will rise for the third consecutive year in 2021.

 

At the Central Economic Work Conference held in 2020, the government made it clear that it was keen on maintaining continuity, stability, and sustainability in its macroeconomic policies. The government promised to continue implementing proactive fiscal policies combined with prudent monetary policies. The pace at which the central bank's monetary policy will return to normal will not change, so we are likely to see tight macro liquidity throughout  the year.

 

The main difference from last year is that the external economic environment is expected to  improve in 2021. The global equity markets will have  a more optimistic environment and stocks are likely to rally. Coupled with the momentum of the Chinese economy, the value of A-share allocation among investors will increase, and this  will attract more foreign investment by institutions. 

 

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