China - Market Strategy 04 (Aug 18 - Jan 23)

Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby winston » Sat Sep 15, 2018 8:34 am

Bottom-fishing investors should rethink when Chinese companies start buying back their shares

This year, more than 700 Chinese firms, or about 20 per cent of actively traded stocks, have announced plans to spend money on their own shares.

The 24 billion yuan (US$3.5 billion) shelled out so far is just shy of the past three years combined.

In China, major shareholders routinely use their stocks as collateral to secure short-term bank financing. These loans are more common among privately controlled enterprises, which have weak access to bank credit.

In the first half, 22 per cent of listed companies pledged at least 30 per cent of their shares, a 6 percentage point increase from two years earlier.

In the second half, a staggering 1 trillion yuan of share-pledged loanswill be due. A similar amount of corporate bonds will need to be refinanced, forcing these companies to compete for funding.


Source: SCMP

https://www.scmp.com/business/banking-f ... en-chinese
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Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby winston » Sat Sep 15, 2018 9:24 pm

These Stocks Could Soar 100%-Plus within an 18-Month Period

by Dr. Steve Sjuggerud

Source: Daily Wealth

http://dailytradealert.com/2018/09/14/t ... th-period/
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Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby winston » Wed Sep 19, 2018 9:25 am

China Property: Not so “tarrifying”!

National 8M18 sales value growth came in at 16.4% YoY, which was notably lower than the 34.9% YoY growth achieved by the listed developers that we track.

This is unsurprising, as we continue to expect that the bigger (listed) players will grow at the expense of the smaller (unlisted) ones.

In our opinion, while a large-scale roll-back of the current restrictive housing policies would be unlikely, we could see selective policy adjustments on a city-by-city basis.

A sharp drop in ASP would, in our opinion, be negative towards buyer sentiment, thereby putting a dampener on new starts and consequently reducing real estate investments.

Given the broader macro concerns, we believe that the central government would want to avoid such a scenario.

Separately, we think that concerns stemming from the RMB depreciation are probably overdone, as our sensitivity analysis indicates a manageable impact on earnings.

The sector is trading at 5.0x forward P/E, near the troughs of 2011 and 2014 which had headwinds (declining housing prices, supply glut) that are absent in this cycle.

We continue to reiterate our top picks of KWG Group (1813 HK) [BUY, HK$12.50] and Longfor Properties (960 HK) [BUY, HK$26.17].

Source: OCBC
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Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby winston » Fri Sep 21, 2018 7:24 am

Chinese stocks slip lower, taking breather after recent gains related to Beijing’s stabilising measures

China plans to reduce the average tariff rate on imports from most of its trading partners as soon as October.

Liquidity in the financial system remains accommodative, after the People’s Bank of China on Monday unexpectedly lent 265 billion yuan (US$38.58 billion) to banks via its one-year medium-term lending facility.


Source: SCMP

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

Postby winston » Fri Sep 21, 2018 7:24 am

Chinese stocks slip lower, taking breather after recent gains related to Beijing’s stabilising measures

China plans to reduce the average tariff rate on imports from most of its trading partners as soon as October.

Liquidity in the financial system remains accommodative, after the People’s Bank of China on Monday unexpectedly lent 265 billion yuan (US$38.58 billion) to banks via its one-year medium-term lending facility.


Source: SCMP

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

Postby winston » Mon Sep 24, 2018 8:13 pm

China's state-backed 'National Team' may rescue stocks from trade war woes

by Gina Heeb

"When the National Team intervenes in the market, it tends to prefer adding blue-chip index stocks to have an immediate impact on the index," the analysts said.

"By making insurance companies the direct source of funding, the government looks to be encouraging more long-term capital to participate as a 'market stabilizer,'" the analysts said.

Institutional investors may also be motivated to act by more attractive valuations and low interbank borrowing costs, which it can leverage to strengthen its balance sheet.

The team held more than 1,100 stocks that were valued at more than $180 billion as of June 2018, Tong and Zhu estimate.

It operates through at least 21 entities, including the China Securities Finance Corporation; Central Huijin Investment; Central Huijin Asset Management; five mutual funds set by the CSF; 10 managed accounts entrusted with asset management companies; and three wholly-owned subsidiaries of the State Administration of the Foreign Exchange.


Source: Business Insider

https://finance.yahoo.com/news/china-ap ... 00754.html
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Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby winston » Wed Sep 26, 2018 9:53 am

MSCI Consults on A-shr Weight Lift, Proposes to Add Inclusion Factor from 5% to 20%

MSCI announced the launch of a consultation on a further weight increase of China A shares in the MSCI Indexes.

This consultation follows the successful implementation of the 5% initial inclusion of China A shares in the MSCI China Indexes and related composite indexes, such as the MSCI Emerging Markets Index.

As part of this consultation, MSCI proposes to increase the inclusion factor of MSCI China A Large Cap securities from 5% to 20% of their respective free float-adjusted market capitalizations in two phases coinciding with the May 2019 Semi-Annual Index Review and August 2019 Quarterly Index Review;

Add the ChiNext board of the Shenzhen Stock Exchange to the list of eligible stock exchange segments starting from the May 2019 Semi-Annual Index Review;

And add China A Mid Cap securities with a 20% inclusion factor in one phase as part of the May 2020 Semi-Annual Index Review.

Source: AAStocks Financial News
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Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby winston » Thu Sep 27, 2018 7:22 am

Global index compiler MSCI considers quadrupling Chinese stocks’ weightings in its benchmark gauges

Implementation will be carried out in two phases, with the weighting increasing by 7.5pc each during the May and August review process next year

The proposal came just a day before FTSE Russell, MSCI’s main rival, is set to announce its decision on Thursday on adding China’s A shares to its global gauges that are tracked by US$1.7 trillion of global funds.

Local brokerage Shenwan Hongyuan Group expects inflows of as much as 100 billion yuan (US$14.6 billion) if Chinese stocks make up an initial 0.8 per cent weighting of FTSE’s indexes.

China’s weight in MSCI’s emerging market and China indexes will increase to 2.8 per cent from 0.71 per cent if the inclusion factor of large caps is increased to 20 per cent.

China’s weight will further go up to 3.36 per cent after mid-cap companies are included.


Source: SCMP

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

Postby winston » Thu Sep 27, 2018 10:00 am

FTSE Russell: To Include A-Shrs Into Indexes from Jun 19

FTSE Russell announced to include China A-shares into its emerging markets.

At Phase 1, it plans to include A-shares into global indexes in three tranches (June 2019, September 2019 and March 2020).

In June 2019, September 2019 and March 2020, A-share inclusion ratio will be 20%, 40% and 40% respectively, accounting for 1.5%, 4.5% and 7.5% of the total weighting.

Source: AAStocks Financial News
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Re: China - Market Direction 03 (Aug 16 - Dec 18)

Postby winston » Fri Sep 28, 2018 3:26 pm

not vested

<Research Report>M Stanley: A-shr Funds Flow Impact Only US$10-25B from FTSE Index Inclusion, MSCI Weight Increase

Morgan Stanley issued a research report covering inclusion of A shares in FTSE Emerging Markets Index and weight increase of A shares in MSCI, pursuant to which the passive funds flow impact triggered by these two moves are expected to be limited.

The passive funds flow impact due to the changes of the above two indexes will be around US$10 billion-25 billion, the investment bank stated.

The heightened internationalization serves as a long-term positive to A shares, whereas retail investors will continue to lead the market in short term.

Source: AAStocks Financial News
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