Stay Up to Date with Robin's Market Updates

By providing us your personal data (i.e. name, email address and phone number), you acknowledge and consent to our collection of your personal data for the purposes listed below: • Sending you marketing, advertising or promotional materials related to the content of this website, whether by call, text or email; • Provision of products & services which you have requested for. Please note that you are entitled to withdraw your consent for the collection of your personal data at any point in time by clicking on the "unsubscribe" link in the emails you receive. You may also contact us via robinhosa@phillip.com.sg

Friday, December 15, 2017

China Growth and Regulatory Scare - China Market Could Be Heading Down Going Into The New Year



China could face a short term sell off  caused by China’s deleveraging campaign with the renewed squeeze of the shadow banking sector implemented following the Party Congress in October. It has caused the 10-year renminbi government bond yield rising to 3.93% on Wednesday. The aim is  to  squeeze out  shadowy loans and encourage more loan growth to the real economy. China Securities Regulatory Commission (CSRC) recently suspended approval of new mutual funds that plan to allocate more than 80% of their portfolio to Hong Kong-listed equities. It could result in a short term cooling of South Bound fund inflows, further aggravating by the normal seasonal decline in A share trading volume in the run up to Chinese New Year in 16 February.
Indeed that growth scare has already begun, The Caixin/Markit manufacturing Purchasing Managers' Index came in at 50.8 for last month — the lowest level in five months Economists in a Reuters poll had expected the index to read 50.9 for November, lower than 51.0 the previous month.

On 27 Nov, this blog predicted that the Shanghai A Index has peaked and is due for a sharp correction just from a technical perspective . Indeed the Shanghai Stock Exchange A Index (SSE A) underperforming the MSCI Asia Index and trading at a 5 month low. The SSE A index has broke its uptrend channel line, with immediate support at 3445 , its is likely to trend lower in the near term towards 3355 and it will drag the Hang Seng lower. 
All posts and charts are for educational and illustration purposes only

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.