Monday, February 26, 2007

china down 9%, biggest slump in 10 years!

uhh! healthy correction or the beginning of something more severe? funny how they blame (in part) the raise in the bank reserve requirements for the decline. here is the story on the raise

since then the stock market has climbed higher and higher....... looks to me like an excuse for the slump. the next days will be key to see if this could lead to more or the excess continues.

ganz schön happig. ob gesunde korrektur oder der start von etwas ernsten? lustig wie jetzt die erhöhung der bakreserven als (teil) begründung herangezogen wird. lest euch den link oben vom 16. feb. durch. danach sind die aktien lustig weiter gestiegen. die nächsten tage werden wohl entscheiden ob es bei einer "gesunden" korrektur bleibt.

China's Stocks Have Biggest Tumble in 10 Years; Banks Plunge

China's stocks tumbled the most in 10 years as some investors judged record gains in key indexes as excessive. Citic Securities Co., the nation's biggest publicly traded brokerage, led declines.

``The market's very sensitive as it's been trading at record levels and some stocks are considered overvalued,'' '

China Minsheng Banking Corp. led declines by lenders as the central bank raised the reserve ratio this week for the fifth time in eight months, reducing funds available to commercial banks for lending. ( on top of several rate hikes and some warning words from officials, funny that the imminent reaction on the decision were higher stock prices...until today. maybe they should have use a more clear warning this one :-)

dazu noch diverse zinserhöhungen sowie warnende worte der offiziellen. die unmittelbare reaktion waren im übrigen höhere aktienkurse....bis heute. evtl hätten sie ihre warnungen deutlicher formulieren sollen...z.b wie das teil oben.... :-)

here is a quote that should have had an impact / diese zitat hätte eigentlich wirkung zeigen müssen :

Cheng Siwei, vice-chairman of the National People’s Congress has warned investors that “in terms of profits, returns and other indicators, 70 per cent of listed companies on the mainland do not meet international standards”.

The Shanghai and Shenzhen 300 Index, which tracks yuan- denominated A shares listed on China's two exchanges, plunged 250.18 points, or 9.2 percent, to 2457.49 at the close. The measure, which jumped 13 percent in the past six sessions, closed at a record 2707.68 yesterday.

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, plunged 8.8 percent to 2771.79. Today's tumble was the biggest since Feb. 18, 1997. The Shenzhen Composite Index, which covers the smaller one, dropped 8.5 percent to 709.81. The measure has surged 29 percent this year.

Today's rout wiped out $107.8 billion from a stock market that doubled in the past year. The benchmark has gained or fallen at least 3 percent on 10 different days this year.

`Healthy Correction'
Stocks surged last year after a government plan to make more than $200 billion of state-owned stock tradable revived investor demand and paved the way for sales by some of the nation's biggest companies. ( i think this could be only the beginning of a healthy correction..../das könnte der anfang einer sehr ausgedehnten korrektur sein....)

and i think this one is even more impressive. showing the massive outperformance to the rest of the emerging markets and the excess in the last quarter!

dieser chart hier zeigt noch genauer wie sehr die chinesischen aktien den rest der ebenfalls boomenden em abgehängt haben. man beachte nur das letzt quartal....

``China has gone up so much,'' said Winson Fong, who manages $2 billion as chief investment officer at SG Asset Management in Singapore. ``It's not a bad thing to have a healthy correction as it provides an opportunity to correct over-valuations and allow people who have missed out to start buying.''

looks like russ winter nailed this one just in time. make sure you read his post from yesterday

here is today´s take from marc faber

a must hear! :-) / unbedingt anhören!

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Anonymous bub said...

Thank you for the Dr. Faber link. Enjoy your blog!

11:56 AM  
Blogger jmf said...


i think faber is one of the best and most consistent out there.

12:15 PM  
Blogger Rae said...

Danke und thanks for the link and your blog in general.

You do thorough and interesting work. Glad to have you on my site as well!

1:47 PM  
Blogger jmf said...

hi rae,

danke for the kind words.

i would like to see that more german readers visit the blog.

but as long as we are having no bubble...... :-)

i personally think that lots of german stocks are already in bubble territory / the midcap index lost almost 10% within the last 24 hours...)

2:56 AM  
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