China Liquidity
The RP07 Index rose 6.5% overnight, although not yet extreme it is directionally relevant given how dependent China’s growth now seems on credit availability. We may be looking at this the wrong way,...
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Shadow Banking in China, now surpassing Formal Lending
These are worrying charts: And a large percentage of which is going into the property market. Indeed according to Property Forensic Asia, the quantities of money fuelling China’s real estate bubble are...
View ArticleUrbanisation and Chinese Property (Hukou) Reform
Many believe the new government sees urbanisation/property reform as a key engine of economic growth. China’s national plan for urbanization will come out soon, with some reports suggesting that...
View ArticleChina Urbanisation/Property reform (cont). Package by end of June
As discussed, we believe the new government sees urbanisation/property reform as a key engine of economic growth. A change in Hukou (property registration) is very important as it would free up income...
View ArticleChina: is the risk now in what you don’t own?
The four things the market needs to see to turn bullish on China: Deepening of the Capital Markets. Yuan convertibility. De-regulation of interests rates (which leads to deposit insurance). Reform of...
View ArticleChina: time for some balance (cont)
Given how consensually bearish the market is on China, the scarcity now becomes finding the positives. At some point your greater portfolio risk will come not from what you own, but from what you do...
View ArticleChina, for balance (cont):”Ghost cities the exception, not the rule”
Again, and only for balance, we thought this a timely piece by Mark Mobius given the current preoccupation with China bashing. While you should be aware of his own bias (he is clearly bullish) it...
View ArticleChina: Time for some balance (cont)
Given how consensually bearish the market is on China, the scarcity now becomes finding the positives. At some point your greater portfolio risk will come not from what you own, but from what you...
View ArticleChina: Is the risk now in what you don’t own?
We are seeing a real shift in the speed of policy announcements from China and we think this could easily take the market by surprise. While these policies could be being fast tracked to counter what...
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China: like riding a Tiger?
We have been vocal in our call to increase exposure to China recently (in particular as a relative call to Japanese exposure). We understand as well as anyone what the risks are… Growth, NPLs etc etc…...
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China – what is the opportunity?
According to The China Daily “…China can reach its goal of doubling the 2010 GDP and per capita income growth by 2020 if the average economic growth rate is 6.9% to 7.1% over the next 8 years”. We...
View ArticleChina, second derivative improves/rate of decline is slowing
Of itself not a reason to act per se, but for those underweight, mean-reversion now becomes an important consideration: As discussed; ‘A lack of new negatives may be all that’s required for FMS to...
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China: the economy vs. the market
China sees further evidence growth is recovering, with the flash PMI above 50, the first time in 13 months. Sadly, Chinese shares still can’t rally, in part due to a mass of supply about to hit the...
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China: ‘If you fix Housing…’
New house prices rose in 35 out of 70 Chinese cities tracked by the national bureau of statistics, up from 31 in September (and in contrast to broad expectations of a collapse). The Two biggest...
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China: You fix housing…
...you fix a lot of things, not least GDP (being ~10%) and demand for certain commodities, namely copper and lumber. To this end, keep an eye on the SHPROP Index (below), up another 3% today to a new...
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China, “If you fix housing…”
…you fix demand for certain commodities like lumber (below) and copper“. To this end note both SHPROP and Asian property indices continues to rally. The broader Asian Index is making 52w highs, and...
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China: “if you fix house prices…”
We note again the momentum in Chinese property proxies with both the Shanghai Property Index and the Asian Property Index making new highs for the move. As we have said, if you fix housing, you fix...
View ArticleOngoing themes for 2013
For longer-term persuasions, not much has changed for us with the passing of the calendar year. The current debate over cyclicals vs. defensives is overly simplistic, anachronistic, and with respect,...
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If you fix housing…
…in China. Note Credit Suisse has a note out suggesting prices are to rise 5% in large cities with upside risks from liquidity, home-buyer sentiment. You fix house demand/price in China, you fix...
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The Chinese Money supply is also improving
The Chinese Money supply is also improving (chart), which all things being equal, remains a positive indicator for certain commodity demand (our favourites being copper, lumber, food). News the Chinese...
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