Standard Chartered: A-share risk declines Global funds will flow to the Chinese stock market

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Yesterday, Zheng Yudong, director of China investment strategy and consulting at Standard Chartered Bank, said in an exclusive interview with this reporter that it is expected that the valuation of Chinese stocks will rise in 2015, due to the Shanghai-Hong Kong Stock Connect to promote the inflow of funds into the domestic market, investors have increased their overall asset allocation in the Chinese stock market, and the tail risk in the forecast is disappearing, which provides a guarantee for the improvement of valuation discounts.

Zheng Yudong said that the central bank's policy tends to be moderate, and it is predicted that the reduction of the RRR in the first half of the year will greatly alleviate the risks in the financial sector. Corporate earnings will be supported by "low energy prices, accommodative monetary conditions and a decline in domestic yield levels." Earnings showed growth in the third quarter of last year, and while there were large differences between industries, the Communications, Pharmaceuticals, Consumer Options, Industrial and Utilities sectors showed growth and momentum.

"This year is still a year of opportunities for both large and small markets, blue chips, and technology and medical sectors." Zheng Yudong believes that with the opening of the Shenzhen-Hong Kong Stock Connect, global funds will flow to the Chinese stock market.

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Jiangsu real estate merchants have hundreds of millions of funds into the stock market, saying that within 1-2 years, A shares are up

The bull market in A shares is expected not to change, and multi-channel funds continue to flow into the A-share market.

Yesterday, the "Gold Securities" reporter learned that there is a real estate businessman among the newly opened customers of a securities company in Jiangsu, and in less than a year, the continuous additional investment funds have exceeded 100 million.

From 5 million to 100 million

The news shows that the real estate businessman does not directly invest in the secondary market, but indirectly invests in the secondary market by purchasing stock strategic wealth management products issued by securities companies.

In the second half of last year, the person opened an account with the broker for the first time. At the beginning, his judgment of the A-share market was only "OK", only taking out a few million, and after expiration, the return was quite good. He then tried several other different types of wealth management products that were invested in the secondary market. After getting good returns, we began to pay attention to the investment in the A-share market.

The "Gold Securities" reporter learned that at the end of last year, after communicating with securities companies, he made a judgment that the A-share market should be upward in 1-2 years, and since then he has continuously increased investment funds and investment varieties. As of now, his cumulative investment in the brokerage has exceeded 100 million, and he plans to personally trade a small part of the amount.

Stock products are the most popular

Jiangsu bond business people told reporters that under the bull market expectations, funds from various backgrounds are pouring into the A-share market.

"Only from the perspective of the industry, the real estate industry has the most funds, followed by traditional manufacturing, in addition, many customers who used to buy trusts have also come in, and we estimate that this part of the people may have been the group that bought trust infrastructure and platform products before, and now they have also switched to stock-based wealth management products."

The person added, "These investors are all industrial elites, and they decided to put money into it, there must be a reason to be optimistic." ”

It is worth mentioning that the "Gold Securities" reporter learned that due to the good A-share market, all kinds of investors are enthusiastic about participating. Therefore, after the Lunar New Year, compared with other wealth management products, the stock-based wealth management products of securities companies have also increased by the same period last year in terms of the number of issuances.

The head of the investment management department of another domestic securities company also admitted, "Now the focus of work is to issue stock strategic wealth management products." (Jinling Evening News)

China's stock market is bidding farewell to the "casino" era

Beijing, March 15 (15) -- According to the Wall Street Journal, teo said in a research report for CMC Markets, a London-based derivatives trader, that traders may have bought because it was the eighth day of the Chinese New Year, and that feng shui believes that day is auspicious. He also wrote that the reason may also be because the Chinese central bank has injected money into the money market, or because chinese media speculate that China is ready to cut the reserve requirement ratio of banks in rural areas.

The stock market rose more than 2 percent that day, but there is no convincing reason behind it, which is why many investors compare the Shanghai stock market to a casino, a volatile and risky market, especially for outsiders.

But despite the volatility of the market, some investment strategies that have proven effective, such as buying undervalued undervalued stocks, have helped some investors achieve higher-than-broader returns. Such examples are a positive for long-term global investors who are increasingly interested in the Chinese market, which is opening its doors to foreign fund managers.

Jennifer? Jennifer n. carpenter says this is at odds with people's intuition. Her latest research shows that as a measure of future corporate profits, The accuracy of Chinese stock prices reflecting corporate profit prospects is comparable to that of U.S. stock prices. Over the past decade, China has pushed ahead with reforms, improved market conditions, and operated better.

Yao Peng runs a fund that specializes in Chinese stocks. He bought railroad stocks on the A-share market in early 2014 on the grounds that the valuation of such stocks was severely depressed. In 2011, two high-speed rail trains collided in China, killing more than 30 passengers and prompting government authorities to suspend approval of new high-speed rail projects. Since then, railway stocks have suffered long-term setbacks. Yao Peng said that when he bought such stocks, he knew that high-speed rail investment would continue in the next few years.

This seemingly reverse bet strategy has allowed Yao Peng's flexifund equity china a-share fund to pay off. The fund is managed by bnp paribas investment management and haitong securities co. Joint ventures are operated. According to Morningstar inc. The €65 million ($69 million) fund returned as much as 65 percent last year, one of the highest foreign funds that specialize in investing in A-shares.

One of the company's shares, China CNR Co. (601299.sh), surged 82 percent in January after news broke that China CNRC was planning to merge with another locomotive maker, Csr Co., 601766.sh. Yao Peng said they did not expect CNR's stock to rise so much in such a short period of time, and he said his company had not previously invested in CNR based on merger news. He said that when the market was a bit blind, his team only focused on the value of the stock.

So-called value investing came in handsome returns last year, when cheap Chinese stocks, mainly large bank stocks, brokerage stocks and state-owned enterprise stocks, rose sharply. According to credit suisse, some mainland bank stocks have been below book value, but the price-to-book ratio of bank stocks has now reached 2.3 times, the highest level since 2011.

Although the Shanghai Composite Index is currently only about half the high of 2007, it rose 53% last year.

But such an investment strategy could also mean that investors would have to wait years to cash out. According to BNP, while value investing in China was the best approach last year, it sent investors' returns to a low point in 2013, when it would have been better to adopt growth and momentum investment strategies. In other global markets, growth, momentum, and value investing approaches are not much different every year, with little difference in returns.

The discrepancy has even led Chinese investors to race for short-term gains, often following suit to buy popular stocks. Yao Peng said Chinese was very concerned about the news feed broadcast by CCTV at 7 p.m. every night, trying to analyze government policies and media concerns.

Speculative retail investors make up the majority of them. China's equity funds, which account for less than 20 percent of the overall market capitalization, tend to buy stocks of fast-growing companies, even if sometimes their stock prices are inflated. Frequent swaps in China's domestic funds mean that fund managers are less concerned about value-based investments.

Soren Aandahl, head of research at glaucus research group California LLC, said that for the value investment approach to work in the long run, it will require a level playing field and a very transparent market, which China currently lacks. The company's report focuses on potential short-selling targets. The problem, he added, is that there may be more value traps than investment opportunities in China, with some companies with poor governance and other problems such as falsified accounts, and stock prices that should be extremely low.

In a working paper circulated by the National Bureau of Economic Research, scholars Carpenter, Fangzhou Lu and Robert F. Whitelaw used an indicator called "stock price information content" to analyze the accuracy of Chinese stock market movements in predicting corporate earnings. They found that when China joined the World Trade Organization in 2001, the indicator began to rise.

In the years that followed, this indicator rose further with the introduction of market reforms. In 2005, when China carried out the reform of equity splitting, this indicator increased. The reform of the split of shares has enabled a large part of the company's shares, which were previously controlled only by privileged shareholders such as the government, to be listed and circulated.

In recent years, however, the stock price information index has declined, and the authors attribute this to the rise of China's shadow banking industry, which diverted stock market funds and the lack of investor confidence caused by the 2008 financial crisis.

Fourteen years ago, the economist Wu Jinglian asserted that China's stock market was inferior to a casino. The statement resonated among China watchers, but Carpenter and her colleagues said the description was no longer appropriate for Chinese mainland stock market. (Oriental Fortune Network)