CHINAH trade ideas
Chinese stocks listed in the HK market are still crashing.Chinese stocks listed in the HK market are still crashing, continuously crashing, and showing no signs of stopping. This kind of market is difficult to trade and invest in, like trying to row a boat against a raging current.
Investing or trading in any stock listed on the HKEX is also difficult.
Wouldn't it be better to go with the flow? Invest or trade in a more favorable market?
Oh, except for shorting the HKEX, which could be considered going with the flow.
Chinese Equities: A Short-Lived Bounce, Or The Start Of A TurnarMuch focus remains on the Chinese equity space, with major indices having recently printed multi-year lows, as stocks have continued to slump amid ongoing disappointment over the lack of significant fiscal stimulus to attempt to breathe some life into the ailing economy. Many, however, are now wondering whether a catalyst may have emerged to reverse the market’s course.
This catalyst comes in the form of increased government intervention – aka, panic – and greater state attempts to try and prop up the market; the latest of which being President Xi receiving a briefing from officials on plans to stem the stock market bleeding.
While headlines confirming such a meeting sparked a chunky rally, the CSI 300 gaining more than 3% on Tuesday in its best day since 2022, and small caps vaulting higher by almost double that magnitude, it’s worth noting that we have been here many times before of late, as investors attempt to ‘catch a falling knife’, and turn a ‘dead cat bounce’ into a more durable rally.
We’ve also been here many times before in terms of Government attempts to prop up the market. A plethora of (frankly futile) short-selling bans have already been implemented, as have a host of relatively small, targeted fiscal stimulus programmes, mainly focused on the property sector. Furthermore, the PBoC have cut the required reserve ratio (RRR) by 50bp, an attempt to release around 1tln CNY in capital, while also flagging space for further monetary easing in the near-term if required. As the above shows, none of this really worked.
Now, it would appear that efforts to stabilise proceedings have stepped up a gear, not only with Xi receiving the aforementioned briefing, but also with China’s sovereign wealth fund announced a pledge to increase holdings of equity ETFs, for the first time since October. Accompanying this was an announcement from China’s securities regulator noting that it would make ‘greater efforts’ to ‘guide’ long-term funds to enter the equity market. Put in simple terms, all of this is Chinese policymakers trying to engineer a state-mandated bull market.
It is, clearly, far too early to say whether or not those efforts have – or will – work. However, Tuesday’s trade showed some early signs of increased confidence, with net inflows via the ‘northbound connect’ rising to the highest level this year.
Perhaps the most significant question among all this is why authorities are going to such lengths to try and prop up the market.
The most obvious answer lies in the impact of recent declines on consumer confidence. Per official sentiment data from the National Bureau of Statistics (NBS), confidence has fallen off a cliff faster than equity markets have; restoring some degree of optimism is likely a key government priority ahead of the Lunar New Year holiday, typically a pivotal period for consumer spending, and thus economic growth more broadly.
Restoring consumer confidence is one thing, yet restoring investor confidence is likely to be an entirely different matter.
Sentiment has, unsurprisingly, taken a pummelling over the last 18 months or so, as sweeping government crackdowns escalate, and President Xi attempts to exert an ever-increasing degree of control over private enterprise within the country. Macroeconomic concerns also persist, with the lack of any significant or sustained recovery from the pandemic continuing to exert significant pressure.
Against that backdrop, it should come as no shock whatsoever that the Hang Seng and CSI 300 stand as two of the worst performing major equity markets since the start of 2023, with recent gains barely being visible over such a time horizon.
The resolution of those macroeconomic woes, or at the very least a perception that authorities have enough of a grip on the situation (likely by virtue of having thrown enough stimulus at the issue) for a recovery to begin, likely holds the key to unlocking a more durable recovery in sentiment, and equities more broadly.
However, as the most recent PMI surveys show, such a recovery could still be some way off.
Of course, it is not only a rather dismal growth outlook that Chinese markets must contend with. Deflation remains a significant risk, even if CPI is likely to move back into positive territory over the LNY period, leaving the potential for a prolonged debt-deflation spiral elevated. Furthermore, the property sector’s woes persist, and are by this stage well-documented, and exports remain incredibly weak, while Sino-US relations look set to worsen further into, and likely after, November’s presidential election.
On top of all this, international investors – as noted above – remain highly wary of venturing into the market, particularly when other nearby markets offer exposure to Asia, without many of the numerous downsides involved with allocating to China.
While India and Vietnam both stand to benefit as supply chains and production are increasingly moved away from China, it is perhaps Japan that is the most likely to outperform in the region, particularly owing to Tokyo’s ongoing stock market reforms, geared towards boosting valuations, ensuring more efficient use of capital, and return of capital to shareholders, whose proposals are now likely to be listened to by firms in a much more proactive manner.
In summary, the balance of risks points to further downside in Chinese equities over the medium-term. While ongoing efforts to engineer a state-mandated bull market may provide some stability in the short-run, deeply-engrained structural issues, and plentiful downside macro risks, all point to stiff headwinds persisting for some time to come.
Hong Kong cash update (sold at 6402)Posted this market for a sell at 6402 this is the update check my profile for confirmation on the sell signal.
HK China sellI've been Watching this market for a while now for possible sell opportunity markets have confirmed... Come join us if you see it too
Hong Kong Index Shares Decline Related To The Debt Ceiling? We have to tackle this question
Because next month the Federal Reserve Bank
Chairman Of USA
Will make a decision on the current interest rate
which is around 5%
If the chairman increases the interest rate in June.
This could lead to more bank failures
and the value of shares
dropping in companies on the stock market
such as PEPPERSTONE:HK50
who allegedly invest in US Bonds
When the stock market invests in
Bonds the Central Bank increases
Loan Rates to profit bondholders
These types of transactions are allegedly done
at the central bank
If the stock market companies do not invest in
government bonds
The government will not have the revenue to develop the
economy
Bonds are an investment for the local governments
Continue to read more about this debt ceiling situation
WhirpoolCheck for support, resistance, continuation, or slide, on shapes. Confirmation with candlestick patterns or with highs and lows near the interest zones. The arrows are just a guide for potential scenarios. Many probable events can arise. If this turns out to be junk, it is a failed experiment. Previous experiments have turned out to be interesting. Inconclusive.
$CHINAH support should hold 👁🗨*This is not financial advice, so trade at your own risks*
*My team digs deep and finds stocks that are expected to perform well based off multiple confluences*
*Experienced traders understand the uphill battle in timing the market, so instead my team focuses mainly on risk management
!! This chart analysis is for reference purposes only !!
This move will benefit $NIO and $BABA. They have been growing exponentially overseas in China and other countries. My team believes that the Chinese will continue to stimulate their economy financially in order to reverse the damages caused by the Covid-19 pandemic and lockdowns.
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$CHINAH bullish set-up? 👁🗨*This is not financial advice, so trade at your own risks*
*My team digs deep and finds stocks that are expected to perform well based off multiple confluences*
*Experienced traders understand the uphill battle in timing the market, so instead my team focuses mainly on risk management
!! This chart analysis is for reference purposes only !!
If you want to see more, please like and follow us @SimplyShowMeTheMoney
$CHINAH bearish set-up? 👁🗨*This is not financial advice, so trade at your own risks*
*My team digs deep and finds stocks that are expected to perform well based off multiple confluences*
*Experienced traders understand the uphill battle in timing the market, so instead my team focuses mainly on risk management
Bitcoin along with the US market should take a decent hit sometime this week due to the continuation of strength in the US dollar. Bear-Index's, the dollar, and energy appear to be where the money will be flowing during this period if this does play out. This would lead to a temporary slowdown in the growing Chinese economy and allow it to retest support.
!! This chart analysis is for reference purposes only !!
If you want to see more, please like and follow us @SimplyShowMeTheMoney
How China’s zero-COVID policy is taking a toll on its economyThe more contagious omicron strain of COVID-19 is testing China’s zero-tolerance COVID-19 policy and while many signs underscore the strategy’s adverse impact on the country’s economic recovery, Beijing continues to stick to it, dismissing suggestions that China should learn to live with the virus as other nations do.
Lockdowns in Shenzhen and Shanghai
The resurgence of COVID-19 cases in Shenzhen, dubbed as China’s Silicon Valley, prompted authorities to impose a week-long lockdown of its 17.5 million residents in March. The curbs forced the closure of some factories including those of Apple (NASDAQ:AAPL) supplier Foxconn (TW:2317) and carmakers Toyota Motor (NYSE:TM) and Volkswagen (FRA:VOW).
Shenzhen is also home to tech giants including Tencent (HKG:0700) and Huawei Technologies.
While JP Morgan analysts do not expect the Shenzhen lockdown to have a big impact on iPhone production, some economists have delivered a grim warning on the lockdown in Shanghai. Authorities in China’s financial hub last week extended the lockdown of 26 million people as the city launched its largest public health response in the COVID-19 pandemic era.
ING Bank’s Greater China chief economist Iris Pang warned that the cost of the lockdown in Shanghai and in other areas in China will have a “huge” cost to the country’s growth. Shanghai is tipped to suffer a 6% GDP loss if the lockdown persists in April, leading to a 2% GDP loss for the whole of China.
The lockdown in Shanghai also affected the production of some known brands including Tesla (NASDAQ:TSLA), German auto parts giant Bosch, and Taiwan’s Pegatron (TW:4938), another iPhone assembler.
Offshore Yuan and China H-shares
After trending downward for the previous 7 months, news of the extreme lockdowns prompted the USDCNH to break upwards and out of its channel. The USDCNH, at this point, doesn’t have a clear path back to its previous territory.
Conversely, the China H-shares index saw a reversal of fortune on March 16. The China H-shares index follows Chinese incorporated companies which are traded on exchanges outside the country. The boost may have come from investors realising that China would be unlikely to face sanction from the US after failing to condemn the Russian invasion of Ukraine more forcibly in the beginning.
GDP slowdown
The latest developments in China are widely expected to take a toll on the economy that is already battered by the slowdown in the real estate sector and other downward risks. Everbright Securities recently warned that Beijing’s move to cling to its zero-COVID strategy could knock 10 percentage points out of China’s GDP on a quarterly basis in the first quarter.
Natixis, meanwhile, expects the lockdowns and transport restrictions to slash 1.8 percentage points from China’s first-quarter GDP. Julian Evans-Pritchard, senior China economist at Capital Economics, in late March warned that "the economy is in the midst of its most abrupt downturn since early 2020.”
China is set to release its quarterly GDP data on Monday, April 18.
US and China stock performance divergenceBack to mean will happen. Chinese regulatory risks are specific to some businesses, but drag entire market down. This will reverse once the dust settles. Right solid picks combined with patience will result in big wins for the ones, who stays until the end.
HANG SENG CHINA ENTERPRISES INDEX Long idea1. Last lower high broke
2. Creating pattern
3. Waiting price to broke pattern
HSCEI update on 20210217Keep moving on the roof of the ascending channel. Since broke the long term down trend last Q4, HSCEI keeps strong. The next stop would be the down trend started from 2015. It is around 12800. Keep 100% Long position.
HSCEI - wave 3 up under way, probability of more than 10% gainsHSCEI is tracing minor wave 3 up of the primary impulse wave that just came out of a bullish primary triangle. Price should reach levels higher than 11,100 for the top of minor wave 3. If price crosses down 9,300 this analysis should be reviewed. FOLLOW SKYLINEPRO TO GET UPDATES.
HSCEI - opportunity for long-term high growthHSCEI just crossed up the primary triangle that ended cycle wave IV. This setup should push prices to more than double the current value in a period of 2 to 4 years years.This analysis should be reviewd if prices crosses down 9,500. FOLLOW SKYLINEPRO TO GET UPDATES.
HANG SENG CHINA ENT. long term reversion expectedINDEX:HSCEI
Hang Seng China Enterprises Index is finishing a primary degree triangle pattern. It is currently in the last leg of the Intermediate C wave. When complete, wave E ends, as well as cycle wave 4 and price should boost in a long term move up during a cycle wave 5 up
