Still short on Chinese Equities

2022년 9월 7일

Despite the numerous stimulus by the Chinese government, HSI's previous rally seemed to be short lived.
This is in fact, align with my expectations. Reason because: 1. Continuous lock-downs/fears of lockdowns. No one will know when will the city go into lockdown, putting all production etc on hold. 2. Investors' confidence. Despite the credit stimulus, it seems like it is not really helping the demand in the property market.

My expectation is however, to go long on Chinese Equities at 18117. And I am expecting this to be around the end Oct-Early Nov period after the china politburo meeting whereby we could possibly expect the following: 1. Even more stimulus. It seems that the Chinese can withstand further rate cuts but they might not be willing to do so to ensure the stability of the yuan. 2. Ease of quarantine measures. However, point 2 in my opinion, might not have that huge of an effect as expected. Reason being: 1. There is no flights to Mainland China. However, we might expect more flights to Mainland China after the meeting 2. There is still chance of massive lockdowns despite the one that happened in Shanghai earlier this year.