HK & China - Market Direction 01 (May08 - Oct08)

[-dol-]

Short-sellers have to cover eventually.

A series of lower-low can only be sustained if deteriorating fundamentals justify it. The fact that stocks are still making new lows seem to suggest that expectations are being revised downwards and the process is still ongoing.

[-dol-]

SSE down 0.34%
HSI up 1.94%

The H-shares have a good run today despite Shanghai's lacklustre performance. Anhui Conch, Ping An, BComm & China Shipping Dev etc are now trading at premiums to A-shares in China.

If we get another big rally in the coming days, something could be amiss.

[kennynah]

27aug08

hope this helps....pls note, i dont trade china mkt and this chart simply caught my attention and thought i share this here..

note that this chart movement is INVERSE of the selected Xinhua 25 shares movement; hence, if this chart shows a downward move, then one expects the basket containing these selected Xinhua 25 shares to move UP.... pls dont ask me what comprises Xinhua 25 shares...i dont know.

good luck and wish u all huat huat !!!

FXP - Ultrashrt Xinhua25 Proshares

[-dol-]

This is consistent with the recent resillience of H-shares in HK.

[winston]

China considers dividend tax cut to boost shares

China is considering reducing or abolishing the tax on dividends in a bid to boost the rapidly declining stock market, state media reported.

The China Securities Regulatory Commission is discussing the tax with other departments, the Shanghai Securities News reported, citing an unnamed official with the commission.

"You don't just introduce or abolish a tax overnight,'' the official told the paper. "You need a broad consensus before you can implement it.''

The paper quoted unnamed experts as welcoming a move to either cut the tax, which currently stands at 20 percent, or get rid of it altogether, suggesting it would help reduce volatility.

AGENCE FRANCE-PRESSE

[-dol-]

Certainly cannot fault them for want of trying...

Words are less effective in moving markets these days , though.

Today, SSE up 0.34%; HSI down 2.27% (yesterday SSE down 0.34%; HSI up 1.94%) ---> who is the dog and who is the tail?

Yesterday, China Mobile spiked up on 45m shares (almost double recent trading). Today, it sell-off on almost double that volume. This market changes its mind quite fast...

[winston]

Dow: Up 212
SH Open: Up 18 points; Positive
HK Pre-Market: ?? Positive ?
Nikkei: Strong; Up 1.8%
Safer to be a bull today than a bear

1) There could be a technical rebound in HK today as it dropped so much yesterday

2) If HK is up 300 points, would I buy a Put ? Dont know. Depends on SH and Japan

3) If HK is down 300 points, would I buy a call ? Yes

4) Monday is a holiday in the US. A lot of traders are probably away already. Last chance to have a holiday before the cold weather. Volume may rise after Monday.

5) If Gustav smashes the oil facilities over the week-end and if oil spiked up US$10, all hell will break loose next week.

6) Would one take a big position before a long week-end and a potential devastating hurricane ?

[winston]

I have reduced my A50Chinatracker and CSI300 when the Chinese market spiked up recently. I would be looking for a chance to add on to my existing positions if things get weaker. BTW, people are now starting to open new trading accounts again. Who says the retail investors are stupid ?

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China mutual funds incur 1.08 trillion yuan in paper losses

China's mutual fund sector incurred a record 1.08 trillion yuan (HK$1.24 trillion) in paper losses in the first half of this year due to the stock market's tumble but management fees more than doubled from a year earlier, the official Shanghai Securities News reported.

Equities-oriented funds, which put at least 60 percent of their assets into shares, posted a combined unrealised loss of 1.06 trillion yuan.

Qualified Domestic Institutional Investor funds, which invest abroad, had a combined unrealised loss of 24.7 billion yuan.

Money market funds were the only gainers, with a paper profit of 1.30 billion yuan. The data was based on first-half results published by 364 funds managed by 59 fund companies.

REUTERS

[-dol-]

Who says the retail investors are stupid ?

I don't know about that, but those I have come across are a lot more savvy than we care to give credit.

And many sophisticated investors started out as retail investors. There is hope!

[ishak]

Hong Kong shares to remain volatile next week, say dealers
30 Aug, 2008, The Economic Times

Hong Kong stocks will remain volatile next week amid uncertainties in the mainland Chinese bourses and the US economy, dealers said.

For the week ending August 29, the benchmark Hang Seng Index surged 869 points or 4.26 percent to 21,261.89.

The market made a technical rebound on Friday due to speculation that China might introduce market-supportive measures over the weekend at the soonest.

However, Eugene Law, head of research at Celestial Asia Securities Holdings, said the rebound might only be short-term.

"I have serious doubts if the gains will be sustained next week," he said.

"The degree of volatility in our market this week and last week was very high," he said, pointing out that the index gained 400 points on Wednesday and lost nearly 500 points the next day.

"Prospects for the US market will become more uncertain as the presidential elections in November approach. In the meantime, nobody knows where China's markets are headed as sentiment there remains poor," Law said.

Jackson Wong, investment manager at Tanrich Securities, told Dow Jones Newswires that he expected the near-term resistance level for the Hang Sang Index to be 21,700.

"Trading is likely to remain volatile and highly news driven, with investors now tending to lock in gains on quick profit-taking," he said.