China - Market Direction 01 (May 12 - Jul 15)

Re: China - Market Direction

Postby behappyalways » Mon Jun 15, 2015 10:05 am

China’s Stock Market Value Tops $10 Trillion for First Time
http://www.bloomberg.com/news/articles/ ... first-time



China's $358 Billion in Margin Loans Points to Next Bear Market
http://www.bloomberg.com/news/articles/ ... rgin-loans
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Re: China - Market Direction

Postby winston » Mon Jun 15, 2015 10:53 am

Margin Financing

China’s securities watchdog is conducting a public consultation about its new regulation on equity margin financing in the A-share market.

The eligible participant will be required to hold no less than 500,000 yuan (HK$624 548) in the trading account in the past 20 trading days.

Source: China Securities Journal
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Re: China - Market Direction

Postby winston » Tue Jun 16, 2015 4:48 am

Last week a mainland investor used 1.7 million yuan (HK$2.12 million) as collateral to borrow four times the amount.

He invested the entire amount in the A shares of newly merged CRRC (1766).

When its SHARE PRICE fell 20 percent, he lost everything, prompting him to end his life by jumping off a building.

Source: Dr Check, The Standard HK
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Re: China - Market Direction

Postby winston » Fri Jun 19, 2015 4:18 am

Are Shanghai A shares expensive?

They're now trading at 19 times projected earnings a five- year high. The were trading at 36 times projected earnings in 2007.

But a CLSA report gives the real picture. It said the valuation of Shanghai A shares is actually higher than what it was in October 2007 when the index peaked at 6,124 points.

The weightings of mainland banks are too large. The relatively low valuation of these banks an average price-to-earnings ratio of 12 times has pushed down the average PE of the benchmark, thereby distorting it.

If you look at the median of the expected PE ratio of all shares listed in Shanghai, it's 58 times! This is much higher than the current valuation of US, Japanese and local stocks.

Perhaps we should wait for a further correction in the Shanghai Composite Index before we buy the A50 ETF (2822 and 2823).

Source: Dr Check, The Standard HK
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Re: China - Market Direction

Postby behappyalways » Fri Jun 19, 2015 1:35 pm

大行:A股泡沫隨時爆
瑞信料創板瀉50% 基金指下半年高危
http://hk.apple.nextmedia.com/financees ... 9/19189826
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Re: China - Market Direction

Postby winston » Sat Jun 20, 2015 7:58 am

Chinese Stocks Are Cheaper in Hong Kong, but Not for Long

By Ralph Jennings


http://www.thestreet.com/story/13187400 ... -long.html
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Re: China - Market Direction

Postby behappyalways » Sat Jun 20, 2015 12:20 pm

Chinese shares rose 'too high too fast', say analysts
http://www.bbc.com/news/business-33195413
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Re: China - Market Direction

Postby winston » Mon Jun 22, 2015 6:51 am

A-share bubble yet to burst by Andrew Wong Wai-hong

Last week, China's stock market saw its worst performance in the past seven years, with the Shanghai Composite Index shedding 6.4 percent on Friday, down 13.3 percent for the week.

The Shenzhen Composite Index declined 12.7 percent over the week.

Have A shares peaked? Or will A shares have a 50 percent adjustment as the leading banks expect?

It is a consensus that A shares are in a bubble. But it would be a bit early to assert the bubble has burst based just on one week's performance, because A shares belong to the emerging markets, and it is normal behavior in the short term. More importantly is that the tumble in A shares has its signs and explanations.

First, Friday was settlement day for the A-shares futures index, plus a lot of funds from the mainland need to have enough cash in order to enjoy the "performance" bonus at mid-year.

So mainland investors selling in great quantities accelerated the decline of A shares, which is absolutely normal.

Of course, the factor of initial public offerings, or the strengthening of the regulation of margin financing by the China Securities Regulatory Commission may have also affected the performance of A shares.

But the fund pressure brought by IPOs has occurred many times this year, so Chinese investors are used to it. Therefore it is absolutely impossible to impose such huge adjustment pressure on A shares.

As for action taken by the CSRC, it did not begin just last week, and the market did not react in too big a way. So this also should not be the reason why A shares tumbled.

In fact, A shares made foreign investors lose interest owing to their sharp rise in the first place.

I believe the A-share market will bounce back when mainland capital returns to normal.

Source: The Standard HK
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Re: China - Market Direction

Postby behappyalways » Mon Jun 22, 2015 12:36 pm

China Margin Debt Shrinks First Time in a Month Amid Stock Rout
http://www.bloomberg.com/news/articles/ ... stock-rout


Chinese Investors Are Swimming in a Bubble
http://www.bloombergview.com/articles/2 ... n-a-bubble
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Re: China - Market Direction

Postby behappyalways » Tue Jun 23, 2015 11:56 am

China Margin Trades Buckle Leaving $364 Billion at Risk
http://www.bloomberg.com/news/articles/ ... on-at-risk
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