#CNflow 2016.02.22-26

EQUITIES

New Chinese Year, new CSRC chief Liu Shiyu, but again the old ‘bull run’ headlines. If any investors were holding out hope a new CSRC head would usher in a new period of level headed stockmarket management, then perhaps these headlines do not bode well.

In this article “资金陆续进场 沪指剑指3000点“, dead giveaway of state crafted market commentary, putting the word ‘bull’ in a headline. We saw those headlines back in 2014, and look what happened. Second, the prosaic article leaders which run and run till the full stop, attempting to weave in “a myriad of indicators” like “Party meetings in Beijing just around the corner”, and Liu sounds like ‘niu’ (Chinese for ‘bull’).

Third, the analysis which points to a bull run:-

– New RMB loans in January totalled Rmb2.51tn, TSF Rmb3.42tn, a new record high surpassing the Rmb890bn in January 2009. Some insiders predict it will not be long before this record is broken again”

– Government’s social security fund investing Rmb10bn in stockmarket, 

– Foreign investors continuing to enter the market, because the CSRC recently widened QFII quotas to USD1.717bn. Outstanding quota in December was USD450mn.

– Margin lending has continuously increased over the last four trading days.
In conclusion the article points to stockmarket performance around the two government meetings, the National People’s Congress and Chinese People’s Political Consultative Conference. “Over the past two years when these meetings were convened in February, A-shares were up 8 times”.

Related:- Puns make a comeback as well in this headline “起底证监会新主席:生肖属牛!“, which means literally, being born in the year of the bull, but the other meaning, getting rid of Xiao gives rise to the bull market under Liu. 

More and more stockbrokers offering prime broker services to clients, following the demise of the ‘peizi’ (highly leveraged shadow margin lending business) 券商PB业务迎发展良机

CREDIT

Stockbroker analysts believe new loans will remain strong in February as well 2月新增信贷或维持高位

Record new loans issuance in January could boost property sales in all cities, even risking a property bubble. Based on the experience in 2009, lending would be curbed in the second half of 2016 信贷开年放水或吹涨房价泡沫

MACRO

Finance Minister Lou Jiwei laments that average wage increases exceed labour productivity gains by 3%, implying Chinese industry is becoming less competitive 楼继伟:涨工资速度应合理

Shenzhen property market still hot, luxury home sales reach four year high 深圳豪宅1月成交创4年新高

Shortage of skilled workers in the manufacturing city of Dongguan, difficult to attract workers even with monthly wages of Rmb6,000 东莞企业6000月薪仍遭招工难

Chinese overseas property investment leapt 46% in 2015, reaching USD25bn. Top destination the United States attracting USD6bn of real estate investment, Australia USD4.5bn 中国对外地产投资去年增46% Related:- Looks to be same as YoY increase from 2013-2014 去年中国海外投资房地产增长46%

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