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

[winston]

Concerns grow over mounting margin calls as China's stock market slides

CSI300 Index tumbled 6.3% last month, plumbing five-year lows.

The value of shares that face the risk of forced liquidation as a result totals 183.6 billion yuan ($26 billion), up 26% from end-November.

A further 10% slide from the current market levels could trigger margin calls worth nearly 100 billion yuan, Guotai Junan Securities estimates.

Another 20% decline could potentially lead to forced selling worth roughly 360 billion yuan.

In a sign investors are rapidly unwinding leveraged bets, outstanding margin loans shrank by nearly 100 billion yuan in January to a one-year low of 1.55 trillion yuan, 30% below a 2015 peak.

Margin loans are currently equivalent to 2.3% of China's total stock market capitalisation.

Source: Reuters

https://finance.yahoo.com/news/concerns ... 38204.html

[winston]

Why China's national team won't save spiraling markets

by Tom Westbrook and Summer Zhen

For a second day running state-backed buying likely scraped Chinese stocks from multi-year lows.

"National Team" poured $17 billion into index-tracking funds last month and were piling in on Friday and Monday.

Mainland stocks are worth nearly $9 trillion.

Numerous market-focused support measures such as restrictions on short-selling or reductions in trading duties have also failed to staunch the selloff.

Most big investors say they are waiting for a spending package to help households.

Consumers face multiple crises of confidence in debt, property, and employment, emphasising the multifaceted challenges confronting China's economy.

Source: Reuters

https://finance.yahoo.com/news/analysis ... 00853.html

[behappyalways]

Pt.1 Mainland China will go all out to save the market, will it be successful?

'24.01.30【豐富│東南西北龍鳳配】Pt.1 大陸全力救市，成不成？

https://m.youtube.com/watch?v=jZgTSEH8Gtc

[winston]

Inflows

China saw a $6.3 billion inflow into stocks, following on from an almost $12 billion inflow the previous week.

This meant the past four weeks saw the largest cumulative inflow on record of just over $21 billion…

Source: Investor Place

[winston]

China tightens trading curbs

Officials this week imposed caps on some brokerages' cross-border total return swaps with clients, limiting a channel that can be used by China-based investors to short Hong Kong stocks.

At the same time, some Chinese brokers that use the channel to buy mainland shares for their offshore units were told not to reduce their positions.

Some quantitative hedge funds meanwhile were banned from placing sell orders completely starting yesterday, while others were barred from cutting stock positions in their leveraged market-neutral funds.

These bets, known as a Direct Market Access strategy, are believed to have amplified the recent sell-off in small-cap stocks.

Struggle to end a three-year rout that's erased some US$7 trillion (HK$54.6 trillion) of value.

Source: Bloomberg

https://www.thestandard.com.hk/section- ... ding-curbs

[winston]

Top Chinese Hedge Fund Banxia Slashes Stocks for ‘Survival’ in Rout

A top Chinese macro hedge fund said it slashed stock positions last month as the nation’s market rout deepened, taking losses after acknowledging mistakes betting on a rapid economic recovery.

Only keeping exposure to safer high-dividend stocks and bigger companies in the CSI 300 Index.

Source: Bloomberg

https://finance.yahoo.com/news/top-chin ... 10618.html

[winston]

CSRC to Stop New Secondary Securities Lending by Brokerages in Accordance with Law

Propose measures to further strengthen the supervision of the securities shorting business.

These measures include the suspension of new secondary securities lending (brokerages borrowing securities from other sources to lend to short sellers) in accordance with the law, with the current secondary lending amount as the upper limit, and the gradual settlement of the existing secondary lending agreements.

Securities companies are required to strengthen the management of clients' trading behaviour and are strictly prohibited from providing securities shorting services to investors who use shorting to carry out intra-day rollover transactions (de facto T+0 transactions).

Source: AAstocks.com

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

[winston]

Central Huijin's Bailout Shores up A Shrs Notably; CN Brokers: A-shr Mkt Deployment Value Displayed

Central Huijin Investment Company Limited (Central Huijin) expanded the scope of ETF holdings.

China Securities Regulatory Commission (CSRC) issued a series of articles that require listed companies to take different measures to enhance the value of investment.

Source: AAstocks.com

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

[behappyalways]

China's stock market has fallen for two consecutive years and Hong Kong stocks have been ridiculed as a "capitulation market"

中國股市連跌2年 港股更遭譏諷是"投降市場" TVBS文茜的世界財經周報 20240128

https://m.youtube.com/watch?v=9RKtbjNOwTc



"北上廣"也淪陷! 中國經濟蕭條 大量店鋪關門 廣州商場冷清 民眾上街直擊一排店鋪全關! 年關將近經濟未起色 民眾嘆"很多人都失業"｜記者 謝廷昊｜【國際大現場】20240129｜三立新聞台
https://m.youtube.com/watch?v=j9X_rtfZY10

[winston]

Will the CCP Save China’s Stock Market?

Rumors abound that Xi Jinping will order state-owned firms to repatriate funds held overseas and use the funds to buy Chinese stocks.

By Milton Ezrati

Rumors say the effort will involve 2 trillion yuan (about $280 billion).

The pace of growth has slowed dramatically from historical averages, and earnings growth, the fundamental support for stock values, has slowed with it.

The decline in real estate values has detracted from households’ net worth so much that Chinese consumers have pulled back on their spending.

At the same time, Chinese exports have suffered as foreign buyers have sought to diversify supply chains and foreign governments have shown an increasing hostility to Chinese trade—most notably in Washington, Brussels, and Tokyo.

Source: Epoch Times

https://www.theepochtimes.com/opinion/w ... mBjzCEs%3D