14 Jul 2015
China equities turnover surge in Q2 poses upside risks to GDP forecasts – Nomura
FXStreet (Mumbai) - Research Analysts at Nomura believe sharp surge in China equities markets turnover in Q2 poses upside risks to the bank’s Q2 GDP growth forecast of 6.6% y-o-y.
Key Quotes:
Historically, there has been a high correlation between stock exchange turnover and financial services value-add. In Q1 2015, the financial services sector constituted 10% of China’s nominal GDP.
China Q2 GDP data will be released tomorrow morning, and the strong financial activities pose upside risks to our 6.6% Q2 GDP growth forecast.
Stock exchange turnover continued to surge in Q2; the daily trading value averaged RMB2.2trn in Q2, which is over 70% higher than the RMB1.2trn in Q1.
However, year-on-year non-financial sector growth is likely to be lower than it was in Q1, due to a high base effect from Q2 2014,although sequential growth started to improve in Q2 2015.
Key Quotes:
Historically, there has been a high correlation between stock exchange turnover and financial services value-add. In Q1 2015, the financial services sector constituted 10% of China’s nominal GDP.
China Q2 GDP data will be released tomorrow morning, and the strong financial activities pose upside risks to our 6.6% Q2 GDP growth forecast.
Stock exchange turnover continued to surge in Q2; the daily trading value averaged RMB2.2trn in Q2, which is over 70% higher than the RMB1.2trn in Q1.
However, year-on-year non-financial sector growth is likely to be lower than it was in Q1, due to a high base effect from Q2 2014,although sequential growth started to improve in Q2 2015.