Wuhan - A picture tells a thousand words

Zach Riaz

Banyantree Investment Group

Source: AFP news agency

Keeping it short, the above picture is likely telling you:

(1) The organizers of this party are about to get a visit from government representatives. There is no doubt China has/had the toughest restrictions for fighting Covid-19. So, if social distancing rules and wearing a mask is now considered a way of life globally (and presumably implemented in China), then a few people will be very nervous with this going viral.

(2) If point (1) is true (which would surprise me a party of this nature was allowed to take place), a Covid-19 outbreak could be on the cards and restrictions are coming. Negative for long-China theme. 

(3) China has a vaccine (or you are looking at a state sponsored mass trial in this photo). Positive for long-China theme.

(4) Take it on face value, restrictions have been lifted and that picture represents a society which has completely reverted to pre-Covid ways. It is not even a normal party, it is a pool party! Under this scenario, you would think the outlook is good for Chinese assets and economy. It also backs up the improving trends in China’s economic data. Positive for long-China theme.

I'll leave you to decide what to make of it. 

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Zach Riaz
Investment Manager / Director
Banyantree Investment Group

Investment Manager and Director at Banyantree Investment Group, with responsibilities across equity and multi-asset strategies. Zach has over twelve years’ experience including portfolio management and sell-side investment research.

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