Tag Archives: China

Warren Buffett Is Winning Fans in China

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“The auction was the latest sign of the Berkshire Hathaway Inc. chief’s rising popularity in China. At the company’s annual meeting last month, more than 200 people traveled from China to listen to Mr. Buffett and his partner Charlie Munger answer shareholder questions.  At last month’s Berkshire meeting, Messrs. Buffett and Munger answered several questions about China. Mr. Buffett called the country’s growth ‘totally miraculous.’ ‘I would not have believed a country of that size could move so far, so fast,’ he said. ‘They found a way to unlock their potential.’ Mr. Munger, also an ardent China fan, was equally bullish.”

http://www.wsj.com/articles/warren-buffett-is-winning-fans-in-china-1433875091

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US oil settles down 1.3%, at $51.65 a barrel; lowest since April

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“Oil prices closed at their lowest level in nearly three months on Wednesday as data showed an unexpected build in U.S. crude oil and product stocks.  While most expected the U.S. Energy Information Administration’s (EIA) weekly report to show a decline in crude oil and gasoline stocks, both rose, along with distillates.  Crude was already facing downward pressure from an accelerating plunge in China’s stock market and the Greek debt crisis, both of which raised concern about fuel demand.  China is the world’s second-largest oil consumer.”

http://www.cnbc.com/id/102816491

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Investing In China’s New Silk Road

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“What happened to the original Silk Road?  It slammed closed under the rule of Mao Zedong and his Cultural Revolution. He closed all transport to the west.  That’s why, even today, most exports from China to the West travel by container ship — a trip of over 9,500 miles, crossing 15 different seas.  It’s a little crazy if you think about it. Because China is part of the Eurasian landmass and has overland access to all of continental Asia, Europe and even the Middle East.  Moving freight overland instead of by sea would be incredibly more efficient.  Consider that for a minute. How things might change if China — arguably the world’s largest economy now — had easier access to the rest of Asia and Europe.”

http://www.moneyandmarkets.com/reports/RWR/chinasilkroad/v/

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Watch Greece – But Don’t Ignore China

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“You might think you’re insulated from the turmoil if you don’t own investments like China-equity based ETFs. But the reality is that the speed of the decline and surge in volatility has spooked investors in a wide range of China ‘proxies.’ Think metals like copper and the companies that produce them, commodity currencies like the Australian and New Zealand dollars, and other ETFs that own foreign stocks in Asia and South America.  So what’s next? Well, many of those markets have already been beaten down to dirt-cheap levels. They reflect a heck of a lot of pessimism, and arguably could be the value trades of the decade once the panic subsides.”

http://www.moneyandmarkets.com/watch-greece-dont-ignore-china-72085

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China Bans Margin Calls; Limits Pension Funds To Buying Stocks Only

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“What do you do when two policy rate cuts, $19 billion in committed support from a hastily contrived broker consortium, and a promise of central bank funding for the expansion of margin lending all fail to quell extreme volatility in a collapsing equity market?  Well, you can simply ban selling, which is apparently the next step for China.  According to Caijing, the country’s national social security fund is now forbidden from selling (but is welcome to buy).  The pension selling ban comes just days after China moved to curtail margin calls in a similary ridiculous attempt to stop the bleeding by simply making selling against the rules.”

http://www.zerohedge.com/news/2015-07-06/peak-desperation-china-bans-selling-stocks-pension-funds

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China’s brokers pledge to buy stocks to prop shaky markets

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“China’s top securities brokerages said on Saturday that they would collectively buy at least 120 billion yuan ($19.3 billion) of shares in a bid to stabilize the country’s stock markets after a slump of nearly 30% since mid-June.  The pledge follows near-daily official policy moves over the past week, including an interest rate cut and a relaxation of margin lending rules, that have so far failed to arrest the sell-off, which some market watchers fear could turn into a full-blown crash.  While brokerages were likely to focus on stronger, blue-chip companies, Hao said there would be little interest in saving small and wildly overvalued ‘growth’ firms. Such companies are favored by ordinary investors.”

http://fortune.com/2015/07/04/china-to-buy-stocks-to-prop-shaky-market/

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China to create $19B fund to support plunging stock market

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“For months, state-owned media had encouraged ordinary Chinese to load up on shares. Many Chinese individual investors borrowed heavily to buy stocks — taking out so-called margin loans. And the rising stock prices encouraged companies to raise money by issuing shares and to use the proceeds to pay down debt.  In the first half of the year, the Shanghai stock market led the world in initial public offerings: 78 companies issued shares in Shanghai, raising $16.6 billion, according to a study by the accounting firm EY. Hong Kong was No. 2 with 31 deals that raised $16 billion. Shenzhen was No. 5 with 112 deals that raised $7 billion.”

https://www.washingtonpost.com/world/asia_pacific/china-to-create-19b-fund-to-support-plunging-stock-market/2015/07/04/da2fbd04-22c6-11e5-a135-935065bc30d0_story.html

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China Market Rout Spreads From Stocks to Price of Pig Food

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“China’s stock rout spread to the country’s commodities markets as investors rushed to raise cash.  Everything from silver to sugar to eggs tumbled with the Shanghai Composite Index, which crashed to a three-month low on Wednesday. Government measures to stabilize equities are failing to stop a stock market collapse.  Metals including nickel and silver on the Shanghai Futures Exchange fell to their daily limits, while rubber entered a bear market. The volume of copper traded was almost six times the three-month average. Steel rebar and iron ore, as well as eggs, sugar and soybean meal dropped to the lowest level allowed by their exchanges.”

http://www.bloomberg.com/news/articles/2015-07-08/china-market-crash-spreads-from-stocks-to-the-price-of-pig-food

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China’s retail investors give up hope as stock market exodus intensifies

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“The precipitous plunge in Chinese stocks, and Beijing’s struggle to halt the fall, has sent waves of panic through the country’s 90 million-plus retail investors, who say their life-savings are ‘falling into an abyss.’  At a Citic Securities brokerage in Beijing on Wednesday, the trading hall was packed was packed with retail investors, many of them pensioners, lamenting the loss of the money in the stock market. One investor was watching the big screen between his fingers as if at a horror flick.  The mood was fearful, panicked and sometimes hostile, as investors waited to see whether the latest moves by Chinese authorities to prop up the stock market would do any good.”

http://www.cnbc.com/id/102816517

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While the smart money is selling in the US, it’s buying emerging markets

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“Private equity (PE) firms are selling stocks at the fastest pace in history.  According to Bloomberg, PE firms have sold $73 billion of their holdings to the public so far this year. Like all investors, PE firms want to sell their investments at the best price possible. So they sell the most when they think the market is topping out. PE firms have access to information that the public doesn’t have.  So when they’re selling, it’s a bearish sign. The S&P 500 has now rallied 204% since bottoming in March 2009. And it hasn’t had a 10% correction in more than three years. Bridgewater Associates, the largest hedge fund on the planet, now has 60% of its portfolio invested in emerging markets (EM).”

https://www.caseyresearch.com/articles/the-smart-money-is-selling-everything-thats-not-nailed-down

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