By Zheng Buchun

A-shares tumbled on Wednesday with Shanghai Composite down 0.79% and Shenzhen Composite 1.05%.  Insurance stocks, bank stocks and security stocks did well yesterday. But hybrid ownership reform related stocks such as China Telecom and China Southern Airline dropped.

Reform stocks can be hot throughout the year, but will not rise as high as previous days. The number of reform stocks will increase after local enterprises start to carry out hybrid ownership reforms.

Many investors blamed IPOs for the sliding of individual stock prices. However, I think the major causes for liquidity strain are rising commodity prices and countermeasures for RMB depreciation.

Investors should pay attention to what Donald Trump says at his first press conference after taking office. If Trump only adds taxes on a few Chinese products, the A-share market will keep stable. Otherwise, investor should step back and wait for more information.

Email: tanyuhan@nbd.com.cn