Shanghai (SHCOMP) recovered 1.4% today (to 2910.88) after dropping around 10% from peak, and 5.8% yesterday (NB – worst performance of any country index yesterday).
Well known ex-Morgan Stanley economist Andy Xie believes the index is set for a further 10% drop as banks reign in their lending.
Yunnan Copper halted trading yesterday after falling 10%. The company reported a loss and said that it “sees no clear signs of recovery”.
I would like to point out that the Communist Party will celebrate 60 years of power this coming October. The Government is unlikely to want a major slump in markets just before this milestone. As a result I suspect some mechanism will be found to reduce downward pressure on the Chinese stock market. Perhaps once Xie’s fears pan out over the coming days it will be a good time to long the market before the celebrations commence.
Without a brokerage account (normally with high fees), China is not always an easy market to enter. Here are a couple of more accessible instruments that provide exposure:
China Tracker HKG 2801