Contents
[Strategy for second half of reflationary period]
1. Second stage of bull market; short-term correction to provide buying
opportunity ..................................................................................................................
1) Earnings-driven rally begins; first stage of reflation
2) Reason 1: Rallies tend to last longer than pullbacks
3) Reason 2: Favorable quarterly macro indicators and corporate earnings to peak in 4Q
4) Reason 3: Large-scale economic stimulus package to continue till 2010
2. Investment strategy in times of reflation: First stage – beneficiaries of
government policies and quantitative easing; Second stage – material and
energy shares..............................................................................................................
1) Beneficiaries of first stage: government SOC, tax cut, and quantitative easing beneficiaries
2) Beneficiaries of second half of reflationary period: materials and energy plays
3) Underweight beneficiaries of government support measures and overweight materials
[Model portfolio evaluation]
1. Model Portfolio ............................................................................................................
2. Model portfolio performance......................................................................................
[Chart Book]...................................................................................................................
1. Economic cycle
2. Corporate Earnings
3. Valuation/Momentum
4. Capital flow