China - Market Strategy 05 (Jan 23 - Dec 24)

[winston]

<News Alert> China/HK equity strategy: CNY holiday data - booming tourism, cautious spending, sluggish property sales

Data from the 8-day Chinese New Year holiday indicate strong travel demand, cautious consumer spending, and a sluggish recovery in the property market

Holiday data reaffirm our preference for consumer services segments over consumer goods

Preferred stocks incl. Trip.com (9961.HK), Tongcheng (780.HK), Yum China (9987.HK)

Source: DBS

https://www.dbs.com/insightsdirect/coun ... ecid=18241

[behappyalways]

Yet again, it has been a kind of torture for investors in Chinese stocks.

Last week, three out of every four stocks in the Shanghai Composite index fell to at least a 52-week low. A Panic Breadth Composite indicator which aggregates breadth measures just hit a record high.
https://twitter.com/sentimentrader/stat ... 6320345384

[winston]

China’s premier urges ‘forceful’ action to boost confidence

Li used a meeting of the State Council, China’s cabinet, on Sunday to urge officials to “do more things that are conductive to boosting confidence and expectations, and ensure policymaking and execution are consistent and stable”, the official Xinhua News Agency reported.

Chinese leaders are hunting for ways to jump-start the economy, which faces headwinds from a property slump, weak business confidence and persistent deflationary pressures.

Authorities sought to stem the equities rout before the holiday, with state funds ratcheting up purchases, a slew of regulatory tweaks to reduce selling pressure and a surprise replacement of the securities regulator chief. A resurgence in travel over the break offered some early signs of consumer spending picking up.

Source: Bloomberg

https://theedgemalaysia.com/node/701364

[behappyalways]

ETF turnover in China has hit a record high, a sign that the country's government continues to support their market
https://twitter.com/Mayhem4Markets/stat ... 6550621217

[winston]

In Rare Move, China Stock Watchdog Vows to Heed Market Criticisms to Avert $5 Trillion Rout

$8.6 trillion stock market.

$5 trillion rout in 3 years.

Source: Bloomberg

https://finance.yahoo.com/news/china-st ... 31988.html

[winston]

China Margin Debt Bounces in Sign Animal Spirits Stirring

The outstanding amount of margin debt balance in mainland bourses rose by 1.1% on Monday to mark the biggest uptick since September.

The balance had fallen for weeks prior to the holiday amid concerns that a downward equity spiral will trigger margin calls and a deeper selloff.

Source: Bloomberg

https://finance.yahoo.com/news/china-ma ... 30453.html

[winston]

China’s ‘national team’ seen stepping up stock market intervention after a sudden surge in assets at top exchange-traded funds

Sudden inflows this year signals heightened intervention by influential state-run funds to support the nation’s stock market

‘In the near term, the national team is still likely buy stocks to create a floor for index levels,’ Julius Baer’s Richard Tang says

by Jiaxing Li

Source: SCMP

https://www.scmp.com/business/markets/a ... e=homepage

[winston]

China Freezes Accounts of Quant Fund After It Dumped Stocks

China’s two main stock exchanges froze the accounts of a major quantitative hedge fund, Ningbo Lingjun Investment Management Partnership, for three days after the money manager dumped 2.57 billion yuan ($360 million) in shares within a minute Monday.

Quant funds are drawing particular scrutiny amid concerns they can amplify market volatility and fuel routs.

The firm was warned multiple times for the same reason this year.

Lingjun is among the four-biggest quant funds in China, with more than 10 billion yuan under management.

Source: Bloomberg

https://finance.yahoo.com/news/china-fr ... 22207.html

[winston]

The Bottom Could Be Close in Chinese Stocks

by Sean Michael Cummings

Chinese stocks have been falling for nearly three years… erasing more than a quarter of the Shanghai Stock Exchange’s market cap.

In October 2023, Central Huijin Investment bought stocks openly for the first time in eight years. It bought heavily, too – $68 million worth of bank stocks in a single day.

In the past, it has taken months for the national team to work its magic.

Source: DailyWealth

https://tradesoftheday.com/2024/02/21/t ... se-stocks/

[behappyalways]

Overnight, the CSRC initiated the biggest change to quant trading in the Chinese market.

Selling within 30mins of open/close is prohibited, and shorting by some DMV accounts have been forbidden as well. One of China’a largest quant funds with AUM worth tens of billions of yuan is suspended from trading, and is publicly denounced.
https://twitter.com/HAOHONG_CFA/status/ ... 1962401083


The PBOC released data today showing the amount of Chinese shares owned by overseas investors fell in 2023 for a second straight year
https://twitter.com/JDMayger/status/1760294597866242469