Why Chinese brokers forecast an A-share tech and chip rebound

Leading Chinese brokerages, including Citic Securities, forecast a rebound in A-share tech and chip stocks in August, citing strong domestic fundamentals and a correction rather than a deleveraging shock. This contrasts with South Korea's Kospi, which suffered a 22% monthly loss in July, its steepest since the global financial crisis, while China's CSI 300 fell 7.9%.

Why Chinese brokers forecast an A-share tech and chip rebound As global investors pull money from South Korea, top domestic brokerages expect strong domestic fundamentals to drive fresh buying in China Leading Chinese brokerages have expressed optimism for domestic tech shares traded in August, distinguishing them from the sharp sell-off that has rattled South Korean financial markets. Citic Securities https://www.scmp.com/topics/citic-pacific?module=inline&pgtype=article said it believed mainland-traded shares – also known as A shares – had only undergone a correction after investors piled into artificial intelligence-related sectors, rather than suffering the deleveraging shock seen in South Korea. “The liquidity pressure in some industries remains, but the impact on some noncore AI shares has now largely subsided,” the country’s second-largest brokerage by total assets said in a note. a sell-off in semiconductor shares https://www.scmp.com/business/markets/article/3362300/how-south-koreas-tech-rout-hit-hong-kong-and-why-regulators-stepped?module=inline&pgtype=article in July, as investors rushed to lock in profits following a strong surge in chip stocks. Despite a rally over the last few days, the memory chip-heavy Korea Composite Stock Price Index Kospi suffered a 22 per cent monthly loss, its steepest decline since the global financial crisis. China’s CSI 300 Index also posted a 7.9 per cent fall, while the S&P 500 Index in the United States slipped 0.1 per cent, its worst July performance since 2014. In Asian trading on Monday, Kospi fell over 5 per cent, while the mainland’s CSI 300 slid 0.98 per cent and Hong Kong’s Hang Seng Index inched up 0.48 per cent.