China - Market Direction 04 (Aug 18 - Dec 20)

China - Market Direction 04 (Aug 18 - Dec 20)

Postby winston » Fri Aug 03, 2018 10:59 am

China Stocks, Yuan Slide as Hopes for Politburo Boost Fizzle Out

August 1, 2018

Yuan trades near weakest on record against currency basket
Developers lead declines in Hong Kong as new curbs announced

“The policies released from the Politburo meeting overnight weren’t anything surprising,” said Steven Leung, executive director at Uob Kay Hian (Hong Kong) Ltd.

“The selling is mainly because of a lack of investor confidence. We need something more drastic to change the view of investors.”

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Chinese equities and the yuan extended losses Wednesday afternoon, gaining downward momentum as concern over possible higher U.S. tariffs overwhelmed optimism about Beijing’s pledge to support economic growth.

The CSI 300 Index of large mainland-listed companies slid 2 percent, its biggest loss in a month. The offshore-traded yuan fell 0.17 percent to 6.8170 per dollar as of 4:59 p.m., while the yuan neared the weakest on record against a trade-weighted basket of currencies. The Hang Seng Index dropped 0.9 percent, erasing a gain of 0.7 percent, and the yield on 10-year government bonds slid 1 basis point.

“The policies released from the Politburo meeting overnight weren’t anything surprising,” said Steven Leung, executive director at Uob Kay Hian (Hong Kong) Ltd. “The selling is mainly because of a lack of investor confidence. We need something more drastic to change the view of investors.”


A communique issued after a Tuesday evening meeting of China’s 25 most senior leaders said the campaign to reduce leverage would continue at a measured pace, while noting that the external environment had “significantly changed.”

Property developers continued to slide Wednesday, after the Politburo vowed to clamp down on home-price gains. The local government in Shenzhen also revealed new tightening measures.

“Don’t expect any aggressive liquidity easing and property loosening. The policy tuning is for China to solve challenges more flexibly, and the policy orientation has always been the same.”

Materials and industrial companies were among the best performing stocks earlier in the day, boosted by a Politburo call for more infrastructure investment.


Source: Bloomberg News

https://www.bloomberg.com/news/articles ... yptr=yahoo
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Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby winston » Tue Aug 07, 2018 6:02 am

China’s stock market bulls and bears are locking heads, leaving room for cautious investor optimism

Nicholas Spiro says despite the recent market turbulence, the divergence of views on Chinese stocks and the economy means the country’s equities could still be attractive

The rout in Chinese stocks – nearly US$2.3 trillion has been wiped off the value of the country’s shares since January (nearly half of this in the past two months).


The bullish case for Chinese stocks – both offshore and onshore – is based mainly on cheaper valuations due to the combination of this year’s steep fall in share prices and, for the time being, a robust earnings outlook.

China bulls also take comfort in the recent shift towards growth-supportive policies.


China bears warned that the current sell-off is worryingly reminiscent of the 2015 crisis, with the additional threat of a trade war. The renewed strains on China’s economy and markets, come at a time when the emerging market asset class as a whole is under pressure, creating dangerous feedback loops,


Source: SCMP

https://www.scmp.com/comment/insight-op ... re-locking
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Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby winston » Wed Aug 08, 2018 7:40 am

China market rises most in two years as pension funds get OK to invest in stocks

The mainland’s major indices gain more than 2pc; Hong Kong’s benchmark up 1.5pc

China's stock market rose the most in two years on Tuesday after the first batch of 14 pension target funds were approved by the China Securities Regulatory Commission.

The People’s Bank of China also decided last week to raise the reserve requirement ratio to 20 per cent from zero for financial institutions when they conduct onshore yuan forwards business on behalf of customers, making it more expensive to short the currency.


Source: SCMP

https://www.scmp.com/business/companies ... -ok-invest
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Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby winston » Fri Aug 10, 2018 7:49 am

China’s regulator quietly removes capital-sapping CDRs as it vows reforms to soothe frayed nerves

China’s stock market has lost US$2 trillion in value since the benchmark index fell 24 per cent from a January high

The regulator will commence by the end of 2018 a cross-border investment channel called the London Stock Connect, which will enable Chinese investors to trade in London-listed equities, and for UK investors to buy Chinese stocks.

The regulator will also support the inclusion of Chinese equities into the FTSE Russell global indexes, and press to increase the weightings of Chinese stocks in the MSCI benchmark.

Missing from the statement is any mention of Chinese depositary receipts (CDRs).




Source: SCMP

https://www.scmp.com/business/china-bus ... ng-cdrs-it
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Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby winston » Wed Aug 15, 2018 8:10 pm

Struggling Chinese stocks may cheer news of increased inclusion on a widely followed index

by Cheang Ming

MSCI will be proceeding with the second phase of partial Chinese mainland stock share inclusion in its Emerging Markets Index.

The move, mostly expected, could prove to be good news for Chinese stocks, which have been under pressure.

Any "foreign money coming in would be a help to stabilize the Chinese stock market" given the declines in the market, said Hao Hong, head of research at Bank of Communications International.

MSCI is adding an additional 2.5 percent of the market capitalization of the stocks included in the index.

Ten A shares will also be added as part of the review, taking the total number of A shares in the MSCI China Index to 236 and representing 0.75 percent of the MSCI Emerging Markets Index.


MSCI will also be making 13 additions to its China All Shares Index. Those companies included China Shenhua Energy, China United Network Communications and Hengli Petrochemical, as well as telecommunications equipment maker ZTE. The changes will be implemented at the end of August.


Source: CNBC

https://www.cnbc.com/2018/08/14/msci-a- ... yptr=yahoo
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Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby winston » Thu Aug 30, 2018 9:32 pm

Indexers Help Cram China Into the World’s Investment Portfolios

Inclusion in major stock and bond indexes attracts record amount of overseas capital to China

By Shen Hong in Shanghai and Joanne Chiu in Hong Kong

Source: WSJ

https://www.wsj.com/articles/indexers-h ... 8?mod=e2tw
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Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby winston » Sat Sep 01, 2018 6:52 am

Foreign demand for China’s A shares to rise following second phase of inclusion in MSCI index, say analysts

Ten firms added to index, bringing the total number of Chinese companies to 236

MSCI increased the weighting of the Chinese large caps to about 0.8 per cent of the index from 0.4 per cent, which was introduced during the first phase of their inclusion in June.

Ten companies were added to the index, bringing the total number of Chinese companies to 236. The partial inclusion factor was doubled to 5 per cent, meaning the stocks will be included based on 5 per cent of their free-float market value.

Given Friday’s relatively smooth operations, MSCI is expected to continue with the process, possibly doubling the weighting to 10 per cent in 2019.

The UK indexes compiler FTSE Russell is likely to promote Chinese A shares to secondary emerging status on September 26, and said it could give them more weighting than MSCI.


Source: SCMP

https://www.scmp.com/business/money/sto ... cond-phase
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Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby winston » Sat Sep 01, 2018 6:58 am

Shanghai’s index slump may have more to go as liquidity dries up in the world’s worst-performing stock market

The number of stocks trading below either the 200-day moving average or their book value is rising, pointing to more losses to come

Of the 1,478 stocks on the benchmark Shanghai Composite Index, 93.3 per cent have fallen below their average prices for the past 200 days, according to Bloomberg data.

That is not far from the 98.2 per cent recorded in January 2012 at the bottom of a slump that did not turn around until 2014.

The number hit 99.9 per cent at the peak of the 2008 global financial crisis.


“The true bottom comes when the US starts to correct.”


Source: SCMP

https://www.scmp.com/business/china-bus ... market-may
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Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby winston » Tue Sep 04, 2018 9:57 am

China’s ‘national team’ now largest A-share investor

The team has held a total of 1,141 A-shares, and the corresponding market value runs as high as 3.1 trillion yuan (US$450 billion), far exceeding the amount held by insurance institutions and public funds, which is less than 2 trillion yuan.

The three major fund holding stocks are Bank of China, ICBC and Agricultural Bank of China.




Source: Asia Times

http://www.atimes.com/article/chinas-na ... 6-31514885
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Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby behappyalways » Tue Sep 11, 2018 3:00 pm

Goldman: Government-directed traders bought up billions in Chinese stocks last quarter
https://www.cnbc.com/2018/09/11/goldman ... arter.html
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