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

[behappyalways]

Singapore hedge fund Asia Genesis shuts after ‘big mistake’ on China trade
https://www.businesstimes.com.sg/compan ... take-china

[behappyalways]

Investment failure! "Chinese stock god" Yunnan Baiyao lost 9.7 billion in two years and announced to withdraw from stock investment

投資失利!"中國股神"雲南白藥兩年慘賠97億 宣布退出股票投資｜非凡新聞｜20240120

https://m.youtube.com/watch?v=Gxf1NkKhR3o

[winston]

Nomura Assumes CN Bailout to Stabilize Stock Mkt, but Support A Shrs More than H Shrs

Nomura suggested in a report that China's surprising announcement of a reduction in the reserve requirement ratio (RRR) and a series of other measures should stabilise the stock market.

The report noted that over the past 48 hours, China announced a series of measures to support the economy and financial markets.

In the broker's view, given the extremely low valuations, very light investor positions and overselling technical indicators, these measures are likely to stabilise stock market sentiment and may even support a relief rebound in China's stock market.

If the bailout measures are followed through, they should be more supportive of A-shares than H-shares, but it is believed that certain sectors of the H-share market should benefit from them.

Source: AAstocks.com

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

[winston]

China wants domestic investors to stop buying so much foreign stock

by Filip De Mott

Beijing is curbing access to overseas securities for Chinese retail investors, the Financial Times reports.

Domestic markets have suffered massive outflows as domestic traders flee to offshore securities.

About a third of funds that invest in foreign stocks and bonds either limited or suspended sales.

Apart from US-centric investing, retail traders in China have also been demonstrating massive appetite for exposure to Japan's Nikkei index, while funds focused on India also gained.

Source: Business Insider

https://finance.yahoo.com/news/china-wa ... 04109.html

[winston]

BoA Continues to be Bullish on Defensive SOEs, Energies, Utilities as Mkt Demand Weak

Bank of America (BoA) Global Research released the outlook for China's equity market.

China is determined to transform itself into an advanced manufacturing-driven economy, and is now at a longer period of change.

In addition to dealing with existing crises such as the property market and local governments' debt, it is important to keep an eye on the new economy segments such as the new energy vehicle (EV) and EV battery industry, which are facing excess capacity and price competition and other situations.

In a more volatile market, BoA was more bullish on defensive state-owned enterprises (SOEs), i.e. stocks with high dividend yields, high index weights, sound liquidity and lower Beta Rate, including state-owned banks, energies, coals and utilities, which are believed to able to continue to outperform.

Demand growth for raw materials for 2024 is expected to be only half of 2023's level.

The BoA was bearish on steel, cement and glass industries due to the uncertainty in the property market.

Source: AAStocks Financial News

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

[behappyalways]

China to Start Rating Chiefs of Central SOEs Based on Stock Performance
https://www.yicaiglobal.com/news/china- ... erformance

[winston]

China share-lending clamp may calm jittery markets

China's securities regulator suspending lending of restricted shares from today to limit short-selling.

But some analysts warned that the market may have not have hit the bottom in the longer perspective with worries about China's economic slowdown and the US presidential elections ahead.

Restricted shares are often offered to company employees or investors with certain limits on their sale, but they can be lent to others for trading purposes, such as short-selling, which can add pressure on markets during a prolonged slump.

Source: Reuters

https://www.thestandard.com.hk/section- ... ry-markets

[winston]

Hedge funds lap up China stocks at fastest pace in 5 years - Goldman

by Nell Mackenzie

The cumulative net buying of Chinese equities for Jan. 23-25 marked the biggest three-day shopping spree in more than five years.

Most of the action last week reflected hedge funds entering into outright long positions -- betting stock prices would rise -- rather than exiting short positions.

Investors poured almost $12 billion into Chinese equity funds in the week to Wednesday in the largest inflow since 2015 and the second-largest ever.

Mutual fund historical holdings sat at a 5.5% allocation to China as of the end of December, the lowest level over the past decade.

Source: Reuters

https://finance.yahoo.com/news/hedge-fu ... 00500.html

[behappyalways]

One retail investor Mr Shi, who asked to be identified only by his last name, said he invested one million yuan ($139,466) in snowballs tied to CSI1000 index and discovered his products had hit the knock-in level on Monday.
When he bought the two-year products in early 2023, he was expecting to earn a return of at least 8%. But now, unless the index rises above the 7,000-level within a year -- implying a 40% rise from current levels -- he will earn no coupon and also lose some of his principal.


'Snowball' derivatives feed China's stock market avalanche
https://www.reuters.com/markets/asia/sn ... 024-01-23/

[winston]

Outperforming SOEs to get bonus points

It will set up a mechanism to give "bonus points" to state-owned enterprises that outperform national economic growth.

This came after the authority said last week that it would study the inclusion of market value management in the performance assessment of executives of key SOEs.

Chinese SOEs reported a 7.4 percent increase in net profit last year. However, their debt ratio also climbed by 0.3 percentage points to 64.6 percent by the end of last year.

In other industrial news, revenue from China's auto manufacturing industry advanced 12 percent to about 10.1 trillion yuan (HK$11.2 trillion) last year,

Source: Reuters

https://www.thestandard.com.hk/section- ... nus-points