CHINA FOCUS : DON'T GET MAD, GET EVEN

18/07/2015 by

I would be surprised if there was no new surprise (s) daily out of China and they have not disappointed even to the extent of defending their GDP numbers which came solely from the wonderful world of Finance !

“”China does not underestimate its GDP deflator and we don’t overestimate our GDP,” National Bureau of Statistics spokesman Sheng Laiyun said Wednesday. ” http://money.cnn.com/2015/07/15/news/economy/china-gdp-economic-statistics/

IT HAS BEEN ALL GOOD NEWS OUT OF REGULATORS !

(Bloomberg) 17 July — China has made 2.5 trillion yuan to 3 trillion yuan ($483 billion) of funding available for government agency China Securities Finance Corp. to support the stock market, people familiar with the matter said. http://commonnewsupdate.com/?p=107346

China stock market volatility poses no systemic risk to real economy, financial system: Fitch http://xhne.ws/LygQP

*CHINA’S CSRC TO SUPERVISE EQUITY CROWDFUNDING BUSINESS
*PBOC TO SUPERVISE ONLINE PAYMENT BUSINESS
China-Bound Supertankers Rise to Second-Highest This Year
China’s Gold Reserves Reach $61 Billion Although Ratio Stays Low
*WORLD BANK CHIEF SAYS CHINA MADE PROGRESS IN LOCAL DEBT MGMT
*WORLD BANK SAYS CHINA’S ECONOMIC FUNDAMENTALS ’SOUND’: XINHUA
China Has the World’s ‘Safest’ Equity Market, HKEx CEO Says
China Insurers Told Not to Call Back Loans Funding Margin Trade
*GOLDMAN CFO SAYS LONG-TERM VIEW STILL SEEMS GOOD IN CHINA
*CHINA CSRC TO CRACK DOWN SPREADING RUMORS ON STOCK MARKET

The list goes on….

FOR THOSE WITH NO VESTED INTEREST……

“Hedge fund manager Paul Singer said that China’s debt-fueled stock market crash may have larger implications than the U.S. subprime mortgage crisis, echoing warnings from fellow billionaire money managers Bill Ackman and Jeffrey Gundlach.”

FOR THE CORPORATES WHO MAKE UP THOSE GDP NUMBERS ….

*AUDI SAID TO ABANDON 2015 TARGET TO SELL 600,000 CARS IN CHINA
Burberry to Review Hong Kong Store Network as Slump Deepens

I do not blame them because the ability to service debt is falling as debt is rising.

I think the best thing to do to slam dunk all the pessimism would be for the global stock markets to correct down 20% and for China to remain stable throughout the time and good faith will return once again ?

I wrote about What Do We Believe In the other day. It is clear that most of us are skeptical or doubtful on China (not intended as a rumour or spreading panic of any sort ! Please have mercy on me !)

Yet the formula is like this ?

BUY WHEN GREED >= DOUBTS /10

SELL WHEN FEAR * 10 > GREED

“Don’t get mad, get even” is not my thing but I cannot speak for the rest of the world so double up if you dare !

Now about the bonds and currency.

Since the beginning of July, 19 China real estate companies have announced almost $7.8 billion in onshore CNY bond sales.

Going ahead, it is clear that only top tier names will tap the USD bond markets and this week we saw just that happening with Goldwin, Zhaohai and Minsheng Bank.

CNH bonds remain in demand for the currency play (which is still in play) as PBoC relaxes foreign central bank and sovereign wealth fund access to their interbank market. http://www.globalcapital.com/article/sfkc75b8p989/pboc-relaxes-foreign-central-bank-swf-access-to-interbank-market

The CNY inclusion into the IMF SDR basket is also set to proceed.

With the PBoC keeping their fixings in check, the CNH has no say and I still believe the latter will converge towards the former in the weeks ahead.

Make no mistake that aftershocks will continue to roil the markets and that the economic is set for a definite slowdown which is evidenced in the falling output of the Chinese steel mills, power plants with over capacity and the Bank of Japan cutting their growth outlook (possibly due to China).

With the S&P expecting that 40% of total global corporate debt will belong to China by 2019 and rising defaults, let just hope for the quick buck and then maybe look to Iran and India next. https://www.globalcreditportal.com/ratingsdirect/renderArticle.do?articleId=1418618&SctArtId=328028&from=CM&nsl_code=LIME&sourceObjectId=9229581&sourceRevId=1&fee_ind=N&exp_date=20250715-05:29:41

Table showing debt demand 2015-2019