Bets on underdogs may give high returns

Betting on underdog stocks such as those of steel, cement and commodities producers may yield surprising returns for A-share investors in the coming year. For, policy stimulus to rescue these traditional industries that are struggling amid the slowing economy, may exceed market expectation, according to several analysts.

After being ignored by investors due to their poor corporate prospects and pressure to trim overcapacity, stocks of steelmakers, cement producers and glass manufacturers began to show signs of a turnaround last week.

A gauge that tracks producers of building materials in the A-share market advanced to a nearly one-month high of 2316.55 points last week, buoyed by the government pledge to take further steps to support the economy, including the struggling property sector, a main contributor to GDP growth.