Company / Analytics

Analytics, 13 January 2020

29 Stocks to benefit from US-China trade deal

Nearly half of these are Chinese technology stocks with sizable exposure to U.S. revenues of more than 25%.

China and the United States are expected to sign the first phase of a trade deal on January 15th. President Trump confirmed via tweet that the ceremony will take place in the White House.

Both countries will benefit economically from the agreement. According to an analysis by Morgan Stanley, 29 Chinese stocks are most likely to benefit from the first deal. Nearly half of these are information technology stocks with sizable exposure to U.S. revenues of more than 25%.

Analysts believe the technology/Internet related and transportation Stocks will benefit from any de-escalation of the trade tensions. Technology stocks will benefit due to their exposure to tariff impacts and technology bans, while transportation stocks, especially Airlines, should benefit from an improved global trade outlook and strengthened CNY/USD.

The stocks are listed on either the Hong Kong, Shanghai or Shenzhen stock exchanges, and include:

Others include: Nexteer Automotive Group, Ningbo Joyson Electronic, Zhongji Innolight, Sunwoda Electronic, Regina Miracle International, Crystal International Group, Alpha Group, Goodbaby International, Bestway Global Holding, Jiangsu Yangnong Chemical, Shandong Nanshan Aluminium, WuXi AppTec, WuXi Biologics Cayman, GigaDevice Semiconductor Beijing, SMIC, Jiangsu Changjiang Electronics Tech, Luxshare Precision Industry, GoerTek, Lens Technology, Shenzhen Sunway Communication, FIT Hon Teng, Universal Scientific, Legends Holdings, Cosco Shipping. Nevertheless, the outlook of these stocks is contingent on the dynamics between the U.S. and China.

On the other hand, Apple is one of the U.S. stocks that is mostly going to benefit from the deal. Considered one of the best-performing stocks in 2019, Apple is also the one stock analysts have been wrong in their forecasts. Apple stocks received mixed reviews from many analysts in 2019, in part necessitated by the escalated trade tensions.

Apple was haunted by trade war fears in 2019 as higher tariffs could raise supply costs for the company and derail rebounding sales of the iPhone in China. With the agreement signed, expectations are high that Apple will increase its sales in the Chinese Market.

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