Financial Markets Around World
- Thread starter 4Runner
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Typical FUD article from Bloomberg, but raises valid points as investor confidence domestic and abroad is at an all time low in China and Hong Kong. I don't think this is a policy issue rather than a political issue. The market has no confidence in Xi.
China stock markets have been "deep-water" from their inception. You would be at your own peril if you traded those stock markets like US stock markets. Besides, the purpose and operation of the stock markets between the two countries are fundamentally different.
If the Chinese government dumped money on the stock market like the US government does (local governments, pension funds, etc) it would rise in value as well.
But why bother? Chinese companies unlike in the US can get funded by banks and local governments.
But why bother? Chinese companies unlike in the US can get funded by banks and local governments.
What do you mean by "deep-water"? I really just view it as an indicator of confidence.
Talking about China stock market was always a trillion-yuan topic as far as I was concerned, no kidding. If you had played in that stock market before, you would certainly have your own views and I would respect that. Let me take a few quick shots and see if you can make some sense out of them.
A well-operated stock market such as NYSE or NASDAQ should have end-to-end regulations that cover every aspect of stocks, from IPO to reporting to malpractices. Traditionally each public company would exhibit fundamental and technical aspects that market makers and traders would latch on, besides macro conditions. Along this line, if I roughly compare state of China stock markets (Shanghai and Shenzhen) to that of US, I would put China markets at similar "robber baron" era in late 19th century and early 20th century. That is not something for uninformed retail investors to mess with.
So allow me to jump to the conclusion: (1) fundamentally China stock markets are not nearly as important to China economical well-being as US stock markets; (2) technically China stock markets are not yet matured enough for retail investors, particularly not for long-term investing like 401K. The "deep-water" part was particularly referring to the gray nature of that operating environment.
By now you may already have sensed that I was of opinion that Xi had nothing to do with the state of China stock markets.
Don't know where else to put this personal anedote. In the early 1990s, I don't remember exactly when, I was on my first holiday trip to China to visit my relatives in Guangdong. Shenzhen was a small, fairly dusty town with many dirt roads and many scooters. I visited this strange building which was essentially a fairly big room with this massive red ticker board on the wall which was quoting stock prices. All around the room there were old fellas sitting down and smoking, watching the board. Although I wasn't sure at the time, I can't read Chinese, I think I was in the Shenzhen stock exchange. How things have changed in 30 years! Anyway, feel free to delete this post if it's not appropriate.
I think you got a real picture of "good old days"
when PRC re-opened its Shanghai stock exchange in November 1990. Shenzhen stock exchange was created and opened in December 1990. The TV series Flourishing Blossom （繁花）vividly described that period. That was stock trading in wild west fashion.Both stock exchanges have evolved since then. But they are still not sufficiently regulated to a point where long-term retail investment can be made.
They need to print more money and then fund the sovereign wealth fund for the purposes of pumping up the local stock markets. Chinese investors should be able to store wealth in the stock market, as the property market has been destroyed by government policies.
At close today, S&P 500 comes to an infliction point yet again by program trading. At this moment, I am open-minded in that, I am not going to be stubborn about of EW count of ABC correction. If it breaks out to the upside in the next week or so, it will continue the bull trend in a new phase. If it comes back in a historical September fashion, it will continue my ABC correction count. My hunch is that it may test the upside on next Monday and come back after the following Tuesday FED decision. The primary reason I am open-minded is that, going into the general election cycle, the incumbent needs everything he/she can muster to get re-elected.