China's major securities companies have high hopes for A shares in 2016 as the government puts forward more supportive policies and the economy continues to stabilize.
The benchmark Shanghai Composite Index fell 0.94 percent to 3,539.18 points on Thursday. The index lost 2.45 percent last week. It took a hit on Monday that it did not recover from despite gains on Tuesday and Wednesday. Mainland stock exchanges were closed on Friday for the New Year's holiday.
The Shenzhen Component Index finished Thursday down 1.75 percent at 12,664.89 points, shedding 2.27 percent for the week.
The CSI 300 Index of the biggest companies traded in Shanghai and Shenzhen fell 0.91 percent to 3,731.00 points, down 2.79 percent for the week.
The ChiNext Index, which tracks the country's NASDAQ-style board for growth enterprises, fell 2.36 percent to 2,714.05 points, finishing the week down 2.89 percent.
Although many investors see the stock markets as volatile, they remain bullish about the prospects of domestic stocks.
Ten major domestic securities companies have made predictions for the Shanghai index in 2016, according to media reports.
Of the 10, GF Securities Co gave the most bearish prediction, estimating that the index will fall to 2,890 points by the end of the year. Shenwan Hongyuan Group Co had the most optimistic prediction, putting the index as high as 4,750 points by year's end.
There were several reasons for the general optimism. Because China's economy has shown signs of recovery, they don't believe it will experience a "hard landing" in 2016, Du Shi Kuai Bao reported on Sunday.
Second, they forecast the central government will continue to loosen monetary policy and provide greater policy support for the capital markets as part of its goal to spur direct financing for companies, according to the newspaper.
As for sectors worth investing in, the major securities companies preferred emerging and fast-growing industries to traditional ones.
Many investors also see opportunities in mergers and acquisitions, especially those related to State-owned enterprises.
There were more than 4,600 mergers among Chinese enterprises in 2015, with a total deal value of 2.6 trillion yuan ($399 billion), according to the financial data dealer Wind.
As there are reasons for optimism, many factors also weigh on the market. For example, there is concern that the highly anticipated registration-based IPO system will water down stock prices.
In addition, some worry that stocks could fall with the expiration of the rule requiring senior executives and large shareholders to maintain holdings in their own companies.
