China - Market Strategy 06 (Jul 24 - Dec 26)

[winston]

Fidelity sees deep value in ‘boring’ China sectors like beer and machinery

There is also notable potential in the Chinese sportswear sector

by Renald Yeo

Source: Business Times

https://www.businesstimes.com.sg/intern ... -machinery

[winston]

Korean funds are buying Chinese stocks again after selling US$984 million in past 3 years

They were net buyers of US$499.2 million this year, with Xiaomi, BYD, Alibaba and Pop Mart among the most active stocks

by Cao Li

South Korean fund managers are renewing their interest in Chinese equities after pulling back from the market in the past three years, joining global investors in diversifying into non-dollar assets amid a weakening US currency.

Korean investors were net buyers of US$499.2 million worth of stocks in Hong Kong and mainland China this year.

The US dollar has weakened 10 per cent against a basket of major currencies.

The investors – primarily pension funds, insurers and brokerages – were net sellers of those equities in each of the past three years totalling US$984.6 million, after buying equities worth US$1.04 billion in 2021, according to SEIBro.

Source: SCMP

https://www.scmp.com/business/article/3 ... pe=section

[winston]

Chinese corporate earnings are likely to support ongoing run for stocks: analysts
With the frenzy surrounding US tariffs cooling and a dearth of policies from Beijing, investors focus on fundamentals

by Zhang Shidong

The earnings season that is under way is likely to spur a solid run for Chinese stocks, as a sunnier macroeconomic environment keeps profit growth afloat.

With the frenzy surrounding US tariffs settling down and a dearth of new economic policies from Beijing, investors are turning their attention to corporate earnings reports to see if the rally still has legs.

So far, analysts seem to believe the results have been positive.

Second-quarter profits for mainland-listed companies likely increased 5.1 per cent from a year earlier, rising for a second consecutive quarter.

Meanwhile, Huatai Securities said it expected overseas-listed Chinese companies to post a collective 13 per cent profit increase in the first half, up from 8 per cent for all of 2024.

Source: SCMP

https://www.scmp.com/business/china-bus ... pe=section

[winston]

Funds with US$617b turn less bearish on China, survey shows

By Vinícius Andrade & Zijia Song

Money managers are scaling back their bearish stance on China, adding technology and consumer stocks to their portfolios amid a four-month-long rally.

Mainland China currently accounts for almost 28% of portfolios across nearly 300 actively-managed emerging-market funds overseeing a combined US$617 billion, the survey shows.

That’s up from 22.5% a year earlier, though the group as a whole remains 340 basis points underweight.

Source: Bloomberg

https://theedgemalaysia.com/node/767262

[winston]

Bubble risks grow as China’s stock bull run defies economy angst

China’s economy is buckling under the weight of tariffs and a deep-rooted property crisis, yet stocks are extending their bull run — a disconnect that’s stirring doubts on the rally’s staying power.

The rally has been driven by cash-rich investors shifting into stocks amid a lack of alternatives.

A bull market will not be sustainable if inflation remains close to 0% and corporate pricing power faces severe headwinds from weak domestic demand.

The amount of outstanding margin debt is at 2.1 trillion yuan (US$292 billion or RM1.2 trillion), compared to 2.3 trillion yuan at the 2015 peak.

Source: Bloomberg

https://theedgemalaysia.com/node/767856

[behappyalways]

Leverage in the Chinese stock market is back to 2015 highs, but the Shanghai Composite sure isn't
https://x.com/Mayhem4Markets/status/1959960172303987104


We got ourselves another bubble folks.
https://x.com/zerohedge/status/1960033532828409858

[winston]

<Research>Haitong Int'l: ST Rally in A-shrs Nearing End; HIBOR Upside Puts Pressure on HK Stocks

Haitong International recently issued a research report believing that the influx of incremental funds will boost A-shares, while global risk appetite may face pressure in stages ahead of the Jackson Hole symposium.

Last week, the A-share market entered an accelerated rally phase, while US stocks remained cautious ahead of the meeting, only recovering this week's losses after Fed Chair Jerome Powell turned dovish.

Related News:: G Sachs Predicts HSI Quarterly Review to Show Largest Passive Inflows in Consumer/ Software/ Auto Stocks

Recently, multiple positive factors boosted A-shares, including continued technological breakthrough, the SHCI breaking through 3,700 and 3,800 continuously, and a significant increase in the probability of the Fed cutting interest rates in September.

For this week, A-shares are facing a sharp rise after positive news, with the SHCI likely to directly challenge 3,900 at the open, very close to the 4,000 target set in the broker's annual outlook.

The room for further upside in the short term may be limited.

Last week's Hong Kong stock market trend was still constrained by liquidity and exchange rate factors, Haitong International added.

In terms of liquidity, the 1-month HIBOR rose sharply to 2.77%, exerting significant pressure on the Hong Kong equity market.

The HSI ascended slightly for the week last Friday, driven by A-shares.

In terms of exchange rates, the Hong Kong stock market is highly sensitive to the USD index.

In terms of individual stocks, large-cap techs continued to attract southbound capital inflows, with TENCENT (00700.HK) seeing a significant increase in net inflows to $4.6 billion.

Source: AAStocks Financial News

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

[winston]

China stocks on course for best hedge fund inflows in 6 months, Morgan Stanley says
 
Global hedge funds ramped up their bets on China shares, with August on track to mark the biggest monthly buying since February, a Morgan Stanley note shows.

Hedge fund buying has been "heavily skewed towards (onshore) A-shares" since early August, Morgan Stanley said, in stark contrast to the influx of funds into Hong Kong's tech-heavy stock market in February following DeepSeek's artificial intelligence breakthrough.

By sector, consumer staples and industrials attracted most inflows last week, according to the Morgan Stanley note on Tuesday.

Meanwhile, hedge funds sold stocks of internet giants listed in Hong Kong through a combination of reduced long positions and short-selling.

Onshore China shares, which lagged regional peers in the first half of the year, staged a catch-up rally in the third quarter and hit a 10-year high this month.

Benchmark Shanghai Composite surged 12 percent while blue-chip CSI 300 jumped 9 percent so far this month.

Abundant liquidity, coupled with optimism around U.S.-China trade talks, has boosted the sentiment, analysts said.

China-focused equity long-short funds on average are up 3 percent this month till August 22, extending year-to-date gains to 13.5 percent, Morgan Stanley estimates.

Source: The Standard

https://www.thestandard.com.hk/wealth-a ... le/310106/

[behappyalways]

Chinese AI chipmaker Cambrian surpasses Guizhou Moutai, once dominating the A-share market.
The Chen brothers, after 10 years of turning losses around, saw profits triple in the first half of the year.
中國AI晶片廠寒武紀盤中超車貴州茅台一度稱霸A股 陳氏兄弟花10年扭轉虧損 上半年獲利翻3倍｜非凡財經新聞｜20250827
https://m.youtube.com/watch?v=4vt6UN0Jgwk


China Banks Warn on Using Credit Cards to Fund Stock Trading
https://finance.yahoo.com/news/china-ba ... 53831.html

[behappyalways]

CHINESE STOCKS MARGIN TRADING BALANCE JUMPS TO RECORD $320B
https://x.com/zerohedge/status/1962718566383284254