Any benefit to corporate profits from Beijing’s stimulus blitz may come as early as next year with the potency of new measures in question. The nation’s entrenched deflationary problems and sluggish domestic demand suggest earnings may continue to suffer as officials have so far given little indication how they plan to reflate the economy.
Investors counting on corporate results to give China’s stock rally a fresh leg up may have to look beyond the current quarter for clues, given an ailing economy and constraints on stimulus efforts.
While forward earnings per share projections for members of China’s benchmark CSI 300 Index have seen an upward revision of about 1.5% since a September trough, they remain close to a six-year low, Bloomberg-compiled data show. The gauge has pared some gains from a 35% surge since the September low as traders await further fiscal measures.
