CCC's Thwarted IPO

We believe that the decision to postpone the Shanghai listing of state-owned China Communications Construction (CCC) reflects the bearish mood spreading through the market. The outlook for China's construction and infrastructure sector is muted, and combined with wider volatility and uncertainty regarding both the global and domestic Chinese markets, China's construction and infrastructure majors could witness a real slowdown in demand. We reiterate our core view which emphasises that the Chinese infrastructure spending spree is spent; and our expectation of an unwinding of infrastructure and construction industry value over the coming years.

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