Overseas Investors Have "Little Appetite" For Chasing Chinese Mania: JPM

To be sure, we’ve had our share of laughs at the expense of China’s margin-fueled equity mania. First there was the realization that more than 4 million new stock trading accounts were created in China last month alone — the country is now adding nearly that many each week. Then we discovered that if statistics are to be trusted, around one in three of those millions of new accounts likely belongs to someone with an elementary school education or less. Finally, we learned that the rally has minted an army of day trading housewives, security guards, and most recently, banana salesmen who last Monday traded so much that they literally overwhelmed the Shanghai Exchange’s volume-tracking software.

But not everyone thinks it’s a veritable tulip mania, just ask HSBC’s head of China equity strategy Steven Sun who “wouldn’t say it’s a bubble,” or Citi who figures turnover in Hong Kong could double from here boosting exchange operator HKEx’s bottom line by 40% in the process. So against this backdrop we wondered: are foreign investors as enthusiastic about the prospects for a continuation of the rally in Asia? 

The answer, it turns out, is no. Here’s JPM:

How are investors positioned in China? Chinese equities continued to rally this week driven by Shanghai-Hong Kong Stock Connect program flows. The Shanghai-Hong Kong Stock Connect program, which allows investors in each market to trade shares on the other market, was launched on Nov 17th 2014, triggering a wave of inflows and speculation into the Chinese equity market initially and the Hong Kong equity market more recently. Figure 7 shows the cumulative Southbound and Northbound flow since Nov 17th. Both flows accelerated over the past week boosting the Chinese and the Hong Kong equity market. Another evidence of domestic support to Chinese equities comes from the continued opening of new trading accounts by mainland traders. The Chinese Securities Depository and Clearing Corporation reports the opening of new accounts in the stock market every week. Weekly account openings reached a new historical high with 3.3 million account openings last week alone. A record 14 million accounts opened so far this year. These account openings suggest that the speculative wave that the Shanghai-Hong Kong Stock Connect program triggered within China is currently accelerating.  

What about overseas investors? The flows into Chinese equity ETFs have been rather negative in recent months suggesting that there is little appetite by overseas investors to chase the Chinese equity rally. How overweight in Chinese equities are these overseas investors? Looking at the share of China in equity ETFs divided by China’s share in MSCI AC World index (Figure 8), we find that overseas investors’ positioning in Chinese equities is rather neutral vs. its history.

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Don't worry though — this guy is still bullish:

Comments

[heisenberg991]

Banana Republic

[Future Jim]

By design ...

George Washington Certain About Illuminati Conspiracy

In  the following letter from George Washington at the Library of Congress, he expresses his certainty about the Illuminati conspiracy that was infiltrating America and the Free Masons.

The Writings of George Washington from the Original Manuscript Sources, 1745-1799. John C. Fitzpatrick, Editor.

Mount Vernon, October 24, 1798.

Revd Sir: I have your favor of the 17th. instant before me; and my only motive to trouble you with the receipt of this letter, is to explain, and correct a mistake which I perceive the hurry in which I am obliged, often, to write letters, have led you into.

It was not my intention to doubt that, the Doctrines of the Illuminati, and principles of Jacobinism had not spread in the United States. On the contrary, no one is more truly satisfied of this fact than I am.

The idea that I meant to convey, was, that I did not believe that the Lodges of Free Masons in this Country had, as Societies, endeavoured to propagate the diabolical tenets of the first, or pernicious principles of the latter (if they are susceptible of seperation). That Individuals of them may have done it, or that the founder, or instrument employed to found, the Democratic Societies in the United States, may have had these objects; and actually had a seperation of the People from their Government in view, is too evident to be questioned.

My occupations are such, that but little leisure is allowed me to read News Papers, or Books of any kind; the reading of letters, and preparing answers, absorb much of my time. With respect, etc.

Use the following links to find the transcript and images of the letter at the Library of Congress: Transcript, Page 1, Page 2.

[tarabel]

Washington was also certain that the enemies of the American Republic would not ultimately triumph.

"The whole world united shall not prevail against her."

[macholatte]

Sum Ting Wong

Government interference always trumps fundamentals.

Didn’t China change its stock trading regulations around November, 2014 just before the big rally took off?  Wasn’t there a correction in January, just before the next big rally took off? Didn’t China.gov change short sale regulations last week just before the next correction and the next big rally took off?

A record 14 million accounts opened so far this year.

Is that a lot for a world with 6 billion sheeple?

 The flows into Chinese equity ETFs have been rather negative in recent months

Which ETFs?

Check these out  

 yinn, ashs, gxc, cn, cnxt, fxi, pek, kba, xpp

over here http://www.etf.com/etfanalytics/etf-fund-flows-tool

Does JPM really know what’s going to happen and is it really interested in helping the sheeple?

[GMadScientist]

Paper Tiger.

[Arius.]

thats a bad sign ...

if blythe is not bitting i wonder who is still left to hang on the proverbial "bag of goodies" ... anybody out there ???

[InvalidID]

 Shit... So when the Chinese bubble pops it'll be Chinese people losing money? I smell civil unrest.

[xerxiesx]

thats why its not gonna pop

[random999]

sure it will, just look a the shanghai history.

There are more people on the train this time, but it wont change anything. We will probably se a larger rate of sucides and desperation.

[random999]

someone always loses..

only on thing is for sure, goldman sachs doesnt. And neighter does its puppets.

The question I have to ask myself is, should i spend my money before it turns useless or should keep some emergency backup in case i lose my income?

[davidalan1]

Chinese tulips in spring

[ebworthen]

JPM is, however, on board for U.S. Banana Republic stock chasing mania.

Assisting CALPERS and Detroit pension funds and their ilk in buying:  Amazon, Netflix, Tesla, Chipotle, Facebook, and Apple shares hand over fist.

"Buy high and sell low" for the retail crowd!

Every seller needs a buyer.

J.P. Mordor Chase.

[Bay of Pigs]

The House of Morgan is the epicenter of fraud and corruption on the entire planet. Anything they say is a either a fabrication, distortion or a bold faced lie.

Fuck them all to hell....

[YuShun]

Highly skilled liers convey information that is true, but misleading.
While ETFs may not be buying Chinese stocks, JPM may be buying. 

[GMadScientist]

The thing about Chinese stocks is, as soon as you buy some, you almost immediately feel like you need to buy some more. ;)

[Ban KKiller]

Capitalism is the freedom to be exploited and front run. 

The pollution in China has affected their thinking, it is official. 

[robnume]

Tyler's taking advice from JP Morgue? WTF, Tyler?