"Interest rate decline, counter-cyclical adjustment and capital market reform are the main threads running through next year," said the institution in its A-share investment strategy outlook for 2020.
The gradual drop in interest rates is expected to increase the valuation of the stock market and lower financing costs for companies, the report noted, especially those in technology industries such as electronics, computers, communications and media.
In 2020, China is expected to deepen its reform in the capital market, with the Nasdaq-style STAR board and the "new third board" being the major focus, said the report.
The institution predicted that counter-cyclical adjustment will provide a certain degree of support for commodities in the first half of 2020, with phased opportunities presented to manufacturing and construction, among other cyclical industries.
With the reform of the capital market and the development of direct financing, top brokerage firms with strong investment banking capabilities will also perform well next year, said the report.
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