Wednesday, August 08, 2007

China's Shanghai Composite ends at record high

China has reached another high. One example more that shows that valuations doesn´t matter ( see China at 45 Times Earnings Fed by `Herd Mentality,' Government , What Bubble? China's Analysts More Bullish Than Ever , How Overvalued Is China ?). It´s all about liquidity. This happened a little bit under the radar of the credit freeze in the US and some parts of the western world. One could get the feeling that China acts as some kind of safe haven....

The decoupling since the credit news is hitting the front pages is remarkable. And the Yuan that will gain doesn´t hurt either..... Wont´surprise me if we hear something from the exchange rate front very soon......

Shanghai vs S&P 500

China hat heute mal wieder ein neues Hoch erklommen. Das Beispiel zeigt das Bewertungen im Prinzip nicht weiter relevant sind (siehe China at 45 Times Earnings Fed by `Herd Mentality,' Government , What Bubble? China's Analysts More Bullish Than Ever , How Overvalued Is China ?) . Es geht einzig und allein um die Liquidität. Die Bewegung in China hat aufgrund der Tumulte vorwiegend am US Kreditmarkt nur wenig Beachtung gefunden. Man könnte fast glauben das China von einigen als eine Art sichere Hafen angesehen wird....

Die Abkoppelung ist in der Tat bemerkenswert. Auch nicht sonderlich nachteilig dürfte der Fakt sein das man wohl zu fast 100% davon ausgehen kann das der zukünftig Yuan massiv an Wert zulegen wird. Würde mich nicht wundern wenn wir bald neues aus dieser Richtung hören werden.

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2 Comments:

Anonymous Anonymous said...

Despite concerns about valuation, it is my feeling that the risk in China is not so high right now. One reason of course is their huge rate of growth. Also, if China has a 'Plunge Protection Team', they will certainly be active as they don't want an embarrassing crash in the run up to the 2008 Smmer Olympics.

eh

12:52 AM  
Blogger jmf said...

Moin Eh,

i agree.

An old argument is "never short valuations". This statement is correct.

I also think that the coming yuan appreciation will boost inflows and liquidity.

2:14 AM  

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