INVESTORS should buy Chinese technology and health care stocks before the country’s annual meeting of the National People’s Congress, or parliament.

That’s according to money managers and brokerages, including Citigroup Inc. and Baptized Capital Co. They say authorities will likely call for enhancing the manufacturing sector’s competitive edge, and the virus outbreak means prevention and control of epidemics will top the agenda of policymakers.

Volatility in Chinese stocks is near the lowest level this year as authorities favor stability before the National People’s Congress. The gathering usually takes place in early March but was postponed to May 22 this year.

Traders hope the meeting will revive the market, with specific stimulus measures unveiled and infrastructure and other projects pushed forward after lawmakers approve the government’s budget.

“Policymakers will likely put more emphasis on technological development to optimize industrial structure as they seek to recoup the economic losses caused by the pandemic,” said Yin Ming, vice president of Shanghai-based investment firm Baptized Capital Co.

“They’ll also pay more attention to improving weak links in the domestic medical sector as well as epidemic prevention and control.”

Investments will be increased in digital infrastructure, including big data and the 5G network, Yin said. He has holdings in both tech and health care stocks and expects any mention of the sectors at the National People’s Congress (NPC) to give the shares “at least a short-term boost.”

Trade friction with the United States will also force China to focus more on home-grown tech and products to replace imports, said Chen Li, chief economist with Soochow Securities Co.

Huaxi Securities Co. said in a note dated last week it expects investors to continue piling into themes like artificial intelligence, big data and cloud computing, with innovation seen as a key topic at the NPC sessions. Its picks include Shanghai Baosight Software Co., Beijing E-Hualu Information Technology Co. and Amethystum Storage Technology Co.

Preventing infection was stressed repeatedly at April’s meetings of the Political Bureau of the Communist Party of China Central Committee. That suggests authorities are prioritizing outbreak containment over stimulating the economy, which will be reflected in policies coming out of the NPC, Tianfeng Securities Co. analysts led by Liu Chenming wrote in a note dated May 10. A big chunk of government spending will flow to sectors including vaccines and medical equipment, according to the note.

Top leaders said last month that special sovereign bonds tailored for epidemic control would be sold as part of efforts to offset virus impact.

Building more metropolitan areas and city clusters can add up to 1 percentage point to China’s economic growth per annum in the next 5-10 years, Citi analysts led by Pierre Lau wrote in a May 10 note. That should benefit industrial park operators and developers with land banks in big cities, Citi said, naming Shimao Property Holdings Ltd. and Longfor Group Holdings Ltd.

Huaxi Securities said that after the NPC, it expects investment to pick up in infrastructure projects, including high-speed railways and toll roads.

Industries that are still reeling from the impact of the pandemic — specifically automakers and firms in the cinema, restaurant and tourism arenas — will likely get targeted policy support from the NPC, according to Tianfeng.

That should be a catalyst for stocks in those sectors, which have been sliding due to bad earnings, it added. China has already exempted the film industry from value-added tax this year. (SD-Agencies)