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

[behappyalways]

President Xi accompanied by Vice Premier He Lifeng visited the PBOC and SAFE this afternoon around after work rush hour. Traffic jam in the financial district of Beijing.
https://twitter.com/HAOHONG_CFA/status/ ... 3627582619

[winston]

Zhang Kun, China’s biggest fund manager, raised bets on liquor distillers, sold tech giants Tencent, Meituan in third quarter

E Fund Management’s Zhang bet on companies he considers best equipped in their industries to navigate the turmoil roiling capital markets

His fund returned 1.6 per cent last quarter, while the CSI 300 Index fell 4 per cent and the Hang Seng Index lost 5.9 per cent

by Zhang Shidong

Source: SCMP

https://www.scmp.com/business/china-bus ... nt-meituan

[behappyalways]

“Such was the price action that greeted China’s latest push..which involved a rare increased budget deficit ratio & Xi’s unprecedented visit to PBOC. The rally lost steam less than 1hr after the mkt opened & main equity indexes ended Wed w/ only modest gains.”
https://twitter.com/shehzadhqazi/status ... 9338685598

[winston]

China Selloff Threatens $27 Billion of ‘Snowball’ Derivatives

Another 10% decline in a major Chinese equity gauge may trigger a wave of selling in index futures tied to structured products.

Source: Bloomberg

https://finance.yahoo.com/news/china-se ... 24893.html

[winston]

Chinese fund managers raised allocations to consumer and financial sectors, in the third quarter, with bets on an economic recovery

Chinese funds increased their stakes in sectors that would benefit from a rebound in the world’s second largest economy after a swathe of growth-stabilising measures

The funds also added positions in cyclical sectors, buying shares of home appliances makers, carmakers and coal producers

by Zhang Shidong

China’s self-sufficiency drive can be distilled into mass consumption, hard technology/manufacturing upgrading, green/renewable energy, and SOE reform.

Industrial profits rose 12 per cent from a year earlier for a second straight month in September.

Source: SCMP

https://www.scmp.com/business/china-bus ... s-economic

[behappyalways]

"China tech IPOs plunge as regulators turn tough on start-ups
https://twitter.com/scottlincicome/stat ... 9633304692


‘Fundamental rethink:’ Investors dump China shares despite new efforts to shore up the economy
https://edition.cnn.com/2023/10/25/econ ... index.html

[winston]

Overseas Funds Reportedly Dump RMB44.8B of A-shrs; Capital Outflow Reaches RMB172B in Past 3 Mths
=
Foreign funds disposed RMB44.8 billion worth of Chinese stocks in October 2023 as the exodus of foreign capital carried on, despite Chinese authorities' efforts to ramp up support, Bloomberg News reported.

Over the past three months, the outflow of foreign capital reached a record RMB172 billion, threatening to turn the full-year performance of Chinese equity markets into net outflow, the report illustrated.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

Short-sellers trying to spark turbulence, warns China

China's Ministry of State Security has warned that short-sellers or those who spread bearish views on the Chinese economy, were trying to spark financial turbulence in China.

The country's top spy agency said in its official WeChat account yesterday that it will closely monitor "national security risks in the financial sector" and combat criminal activities in the sector that jeopardize national security.

This came amid news that China's financial regulators are investigating a month-end liquidity crunch that saw short-term money rates surge to as much as 50 percent, asking some institutions to explain why they borrowed at extremely high rates.

The overnight rate for pledged repo - a short-term financing arrangement - hit a record high of 50 percent on October 31, as a month-end scramble for cash and a flood of government bond sales caused stress in money markets.

The China Foreign Exchange Trade System, a central bank affiliate that operates China's interbank market, has asked institutions that settled trades on Tuesday at the 50 percent rate to submit explanations, according to two sources with direct knowledge.

"Anyone who borrowed money at very high rates needs to explain to regulators the decision-making and bidding process," said another direct source.

Traders and analysts said that an increasing supply of government bonds, and a newly approved sovereign bond issue for 1 trillion yuan (HK$1.06 trillion) had created unusual liquidity stress at a time when banks need to square their books to meet month-end regulatory requirements.

Source: Reuters

https://www.thestandard.com.hk/section- ... arns-China

[winston]

China’s biggest fund managers drum up support for stocks in the face of record selling by foreign investors

Economic data points to an uptrend in growth, stock valuations are below the historical average and firms are paying generous dividends, E Fund’s Liu Xiaoyan says

China’s market regulator said on Wednesday it plans to deepen reforms to attract more long-term capital and boost the capital market

by Zhang Shidong

Source: SCMP

https://www.scmp.com/business/china-bus ... e1ed4cb49a

[winston]

Leveraged buying of Chinese stocks rises as some see return of margin traders boding well for equity markets

The combined outstanding value of margin trading on the Shanghai and Shenzhen exchanges rose to a level not seen since April 2022

The value of short selling shrank to the lowest level since June last year, after regulators raised the margin ratio for short sellers to 80 per cent from 50 per cent

by Zhang Shidong

Source: SCMP

https://www.scmp.com/business/china-bus ... ty-markets