Chinese return luxury shares during basics: Table of the Day

  The shares of Chinese companies that provide basic needs of consumers and those who provide discretionary products are divergent from most in 16 months, a trend poised to put an end to China takes measures to stimulate economic growth.

Charts of the day shows the relationship between the MSCI China consumer staples and discretionary action gauge is the lowest level since February 2011, data compiled by Bloomberg show. The correlation coefficient of 120 days of observations varies from 0.63 to 0.66 based on 28 May The average ratio of 0.80 for a period of six months to March. A value of 1 gives the indices move in motion, while a value of zero means that there is no relationship.

The Discretionary index of Chinese companies in Hong Kong listed Gome Electrical Appliances Holding Ltd. from BYD Co. to fell by 6.2 percent this year on concern the Chinese are compromising on major purchases such as economy cools composed. This is the worst performance among 10 industry groups. The gauge staples gained 1.6 percent.

The ratings of the companies that manufacture the basic products "are very broad and the competition is tough, so there is more danger," Gigi Chan, fund manager at Threadneedle Investments, the U.S. $ 123.1 billion in assets under management, has said, on June 1, 14 maintenance in Singapore. "We found the most interesting ideas in the discretionary space."

HSBC Holdings Plc in Hong Kong-based strategist, recommends Steven and cyclical stocks, quotes, interest rates and declining economic growth. "Cyclical" stocks trading at 12 times estimated earnings on average by 20 percent on average over five years, compared to 15 times for "defensive" companies, the same reduction at the end of 2008, it said in a report . China announced on 7 June reduced borrowing costs for the first time since 2008.

The gauge of 19 companies including discretionary luxury watch retailer Hengdeli Holdings Ltd. and Geely Automobile Holdings Ltd., while the volume comprises of 11 staples company diaper manufacturer Hengan International Group Co., Wumart Stores Inc. and China Mengniu Dairy Co.