Most investors have declared that China is “uninvestable.” Its stock market has been rocked by a disappointing Covid-19 reopening, deflation in its real estate sector, and a lack of stimulus. However, I firmly believe there is a contrarian trade here. https://buff.ly/4dAX3jo
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Greetings, Young Investors! Premier Li Qiang of China has urged authorities to implement more robust measures to restore stability to the country's declining stock market and boost investor confidence. This comes in response to the CSI 300 Index reaching its lowest point in five years on Monday (22/01). In response to a substantial stock market decline, China has committed to injecting additional funds into its economy and opening up its US$64 trillion financial industry to international investors, as part of efforts to regain confidence following a major stock market downturn. They shall scrutinize a spectrum of policies aimed at advancing financial integration, thereby fortifying international financial institutions to facilitate their operations and expansion within the Chinese market. Curious to find out more? Read our latest "China’s Stock Market Fiasco Discharge” https://lnkd.in/gsnCTCuM
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With patience the conclusion will be different. Invest in faster growing Chinese firms. All markets are cyclical. Chinese shares being uninvestible is a West propaganda narrative. On the other hand if China (the greatest trading nation in the world) really is uninvestible, then USA itself will be harmed greatly and strategically. US Dollar may itself be de-dollarized by at least half of the world trading nations.
China companies are growing faster than their US counterparts but fundamentals don't matter anymore. China's inability to influence global fund flows and the narrative is causing it to lose massive stock market value: https://lnkd.in/gsgEHmix
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The total market capitalization of China's A-shares + Hong Kong list Chinest stocks + Chinese ADR in US is about 67% of China's 2023 GDP. This includes more than a 1000 China new IPO in A shares which are inflated, so the real number is about 50%. That compares with 200% for the US, 160% for Japan and more than 120% for India. I am telling every single official I meet this week: Stimulate economy, regain trust, show your action today and build up a long term commitment. We invest into 30 greatest companies in the Chinese economy. If these corporates “fail”, it means the China’s economic and financial systems are not working. Everything else could fail too.
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#DaxueStories on how China’s Stock Market works and why it lags behind the country’s economic growth? 📊The Chinese stock market has not kept up with its economy, despite tremendous growth in the latter. This is due to two factors: the arduous selection process for companies to list on Chinese exchanges and the lack of de-listing of poor performers. 🏛️Currently, only around 5% of Chinese company financing comes from equity, and companies rely much more on bank loans and retained earnings. Meanwhile, only around 7% of Chinese own stocks. 💰Besides, foreign investors face hurdles when trying to buy Chinese stocks, with only Qualified Foreign Institutional Investors (QFII) allowed to participate in the Shanghai and Shenzhen Stock Exchanges. However, efforts have been made to attract foreign capital by scrapping the foreign investment quota in 2019 and establishing stock connects with exchanges in Hong Kong and London. These measures aim to facilitate foreign access to the Chinese stock market. 📖Read more about China's stock market: https://lnkd.in/gx6WEAeG #chinabusiness #stockmarket #Chinastockmarket #stockinvesting #stock #China #Economy
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“It’s obvious that there’s this enormous dislocation between China and the rest of the world and we see a lot of opportunities there.” On our last day of our Australia tour early this month, Brian Arcese, CFA and I sat down with Jack Derwin from Capital Brief to discuss why we view Chinese stock as priced for perpetual decline and the disconnect between China and the global markets. The big picture may seem risky right now, but we see value in many companies for future growth. Read more here: https://bit.ly/46eezoI
Chinese stocks have taken a beating. Here is the case for a rebound.
capitalbrief.com
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China signaled that it will cut its reserve requirement ratio by -50 basis points in early February. This news, following the news of China’s ~$300B stock rescue package, indicates a shift in thinking by the Politburo to a more pro growth stance. It is worth noting that China’s equity markets are trading at multi decade lows, while China’s bond yields are also at multi decade lows. Purely from a valuation perspective, there are arguments to be made that Chinese risk assets have never been cheaper in the 21st century. It should go without saying, markets are highly efficient, and when things are cheap, they are usually cheap for a reason. China’s risk asset cheapness is no exception.
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Global Stock Managers on Guard as China Pain Set to Spread Miners, luxury, industrials seen vulnerable to China slowdown Money managers seek to hedge China risks as slump deepens Global stock managers are bracing for pain as China’s dramatic slowdown undermines the prospects for companies elsewhere that rely on the world’s second-largest economy. Once the most promising bet of the year, investments linked to China have turned into a bane as its property market slump risks spiraling into a systemic crisis. While the selloff so far has been concentrated in Chinese shares, pressure is rising for stocks in Europe, the US and other parts of Asia, whose businesses are swayed by demand in China. #business #finance #financialservices
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Is China past the worst? Gary Dugan sure thinks so. He observed notable strengthening in the Chinese equity market last week – with China CSI 300 Index recording a 10% rebound from February’s low. Global investors have also boosted holdings on Chinese shares for three consecutive months and roughly $3.1 billion of mainland stocks were added via Hong Kong’s trading links. On Tuesday, Communist Party’s elite Politburo hinted at supportive measures to aid the property market sending Chinese property developer’s stocks into a rally. Javelin expects the renewed confidence and momentum to reflect in the surveys from Caixin. Do you think that the worst is over for China? #China #marketinsights
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20+ years' of China's Shanghai stock exchange can be characterized by cycles of boom and bust. The major spikes were triggered by periods of extremely loose monetary policies in China. As the index swings to its 2008 level, the stock markets in Greater China has also seen $5 trillion of wealth wiped out since 2021. #China #Chinainvestment #investment
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