The stock market will remain fragile in 2016 - Chinese experts

Almaty. December 8. Silkroadnews - According to Chinese experts, stock market will remain volatile in 2016, said the portal Chinanews.
"On the stock markets over the next year will be observed frequent raising and lowering, as the weak growth rate greatly affect the mood of the overall market, according to analysts", - says the publication on Tuesday.
It is noted that the stock exchange operating in RMB (A-stock) are more dependent on liquidity.
"Gao Ting, chief China strategist of company "UBS Securities Co" said the exchange, working with the yuan will be more dependent on liquidity, as politicians in Beijing will take more steps to stimulate the economy. However, he warned that some of the risks associated with liquidity can occur, for example, the exaggerated expectations about the depreciation of the renminbi and rising debt on loans for companies" - the newspaper notes.
According to Gao Ting, banks' asset quality may also be reduced.
"Based on past experience, we can say that the market will not function well when there are strong expectations of depreciation of the yuan. An increasing number of loan defaults by companies will adversely affect the quality of banks' assets and reduce the appetite for risk among investors",- he said.
In addition, possible decline in profits from listed companies.
"UBS Securities" predicts a decline in profits by 1% next year, the companies whose shares are quoted on the stock exchange operating in RMB, though earlier this year they expected to grow by 4%. Swiss investment bank also expects the authorities monetary authorities will often reduce key interest rates and reduce the amount of cash that banks must set aside as a reserve for the main 400 points"- the newspaper notes.
According to Gao Ting, sectors such as consumer goods and services, health care and information technology will outpace other areas of the market next year.
It is noted that the leading politicians in Beijing are betting on the proposal focused on the economy in the hope to reduce unnecessary load on production capacity and improve corporate efficiency and competitiveness.