Nomura tips rebound for China stocks

Stocks on the Chinese mainland are likely to perform better in 2013 than this year thanks to a rebound in economic growth, Nomura Securities Co Ltd predicted on Thursday.

"A-share prices may grow by 15 to 20 percent in 2013," said Michael Kurtz, the global head of equity strategy, adding he has very positive expectations amid forecasts for increased economic growth.

Kurtz said he expected rising inflation to reduce the interest rate, which may attract capital from banks into the stock market.

Meanwhile, a rebound in industrial profits and the purchasing managers' index, which tracks industrial activities, will support rising stock indices, he said.

"For the first half of 2013, global stock markets as well as the macroeconomic situation may rebound," he said.

The MSCI Index for the Asia-Pacific region excluding Japan may increase to 530 point in 2013, up by 20 percent on this year, Kurtz said.

A Nomura research note predicts that China's economic growth is likely to rise to 8 percent in the first half of next year, and the main driver will be fixed-asset investment.

The world's second-largest economy may suffer its slowest growth since 1999 this year, at about 7.6 percent year-on-year, according to many economists.

Dai Xianglong, chairman of the National Council for Social Security Fund and a former central bank governor, said the A-share market will perform better in 2013 than this year.

"It needs to seize the opportunity and increase investment in stocks based on a prudent principle," Dai said.

As the country's economic reform deepens and the market mechanism further improves, investors' confidence is expected to rebound gradually, he added.

"Investment access will be strengthened in coming months to lift the returns of the social security fund," Dai said.

Despite the positive outlook, China's benchmark stock index dropped the most in more than a week by Thursday's close, with the Shanghai Composite Index retreating 1 percent to 2061.48.

chenjia1@chinadaily.com.cn