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<Research>UBS Foresees CN Adjustment of Gold VAT to Pressure ST Demand, Promote LT Jewelry Retail Industry Consolidation
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China's adjustment of the gold VAT deduction policy aims to regulate investment product demand centrally, with reduced liquidity possibly shifting some demand towards gold ETFs, UBS said in its report. In the jewelry consumption sector, the broker assumed that the additional tax burden of 7% will likely be passed on to consumers, either for retail or franchised channels. In UBS view, the increase in VAT will exert pressure on near-term demand for gold products and reduce arbitrage potential between investment and non-investment demand. As scrutiny intensifies, the market will further consolidate. LAOPU GOLD (06181.HK) and CHOW TAI FOOK (01929.HK) may face short-term demand pressure, but in the long term, both are expected to further consolidate the market. AASTOCKS Financial News Website: www.aastocks.com |
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