SSEC Surges 2 Days Straight for 6.67 points, Supporting by Govt. Tax Deduction Plan

SSE Composite Index (SSEC) made a huge jump on October 22, 2018 by 104.41 points or 4.09% to close at 2,654.88 points. The index has been on its rise since last Friday after a long plunge from 3558.13 points on January 26, 2018.

The main reason for this submerge is due to the newly published tax deduction plan from the government that is likely to be in action in January 2019 that is expected to be more than 1% of GDP. The special deduction items are related to children’s education, adult education, treatment of serious diseases, the livelihood of elderly, housing loan interest and home rent.

Chinese stocks of consumer goods producers, hotels, travel service providers and others sections are surging today after the announcement of the tax deduction to boost consumption.

Moreover, the rise in the index also due to the reduction of required reserve ratio to increase liquidity for the banks, and the encouragement for share repurchases.

 

The report shows that China’s fixed asset investment growth started to pick up in September. In January-September, China gained 5.4%, while in January-August only grew 5.3%. China’s retail sales also picked up by 9.2% in September YOY, compared to 9% in August. However, China’s real estate investment only increased by 9.9% in January-September, compared to 10.1% of growth in January-August YOY. A good number in September is likely to buoy Chinese’s growth in October.