Consider buying this Chinese company stock once coronavirus contained

We know that the past is often a guide to the future, and if that holds true then there are a number of stocks, especially Chinese stocks, which will rebound once the coronavirus is finally contained.

With nearly all of the coronavirus cases occurring in mainland China, it’s no wonder that Chinese equities have been hit harder than their global counterparts during the outbreak of coronavirus. That makes sense given the quarantine of roughly 60 million people in China, the restrictions placed on travel, and the shuttering of manufacturing facilities and retail outlets. Once this is all past the Chinese equities will be fertile ground for picking up stocks on the rebound.

Does that mean you should rush out and buy Chinese equities today? Probably not, as the virus doesn’t appear to have been contained just yet, and there remain quite a few uncertainties regarding the accuracy of data and the methodology used to identify the virus. Scientists aren’t even completely sure how the virus spreads yet.

Once the virus is contained there are some names out there sure to rebound, although that rebound could be gradual and steady, rather than a V-shaped recovery.

One of the top names to watch is e-commerce company JD.com, which should benefit from having its own logistics network rather than relying on third-party suppliers like its rivals. The company’s 7Fresh brand is already benefiting from increased online purchases of fresh foods, and that benefit should extend into any recovery as JD.com will almost certainly gain market share from the increase in customers during the outbreak.


If you would like to learn more about trading forex and the markets, visit our fx academy to browse through hundreds of trading and theory articles.