China

[Hektor]

https://www.bloomberg.com/news/articles/2024-09-26/china-weighs-injecting-142-billion-of-capital-into-top-banks

 

China Weighs $142 Billion Capital Injection Into Top Banks

• Most of funding will come from special sovereign bond sales
• Move is part of economic stimulus package unveiled this week

[UK]

17 minutes ago, Hektor said:

https://www.bloomberg.com/news/articles/2024-09-26/china-weighs-injecting-142-billion-of-capital-into-top-banks

 

China Weighs $142 Billion Capital Injection Into Top Banks

• Most of funding will come from special sovereign bond sales
• Move is part of economic stimulus package unveiled this week

 

Finally some real action from CCP, lets see if will be enough / how sustainable it is.

[Luke]

https://www.marketwatch.com/story/david-tepper-is-buying-everything-in-china-etfsfutureseverything-9ef11ac6

 

David Tepper is buying ‘everything’ in China: ‘ETFs…futures…everything’

[Intelligent_Investor]

BABA and TCEHY up bigly

[Spekulatius]

29 minutes ago, Luke said:

https://www.marketwatch.com/story/david-tepper-is-buying-everything-in-china-etfsfutureseverything-9ef11ac6

 

David Tepper is buying ‘everything’ in China: ‘ETFs…futures…everything’

Banks too?

[UK]

 

[Luke]

 

Best assets in China with Hang Lung Group IMO 

[Luke]

24 minutes ago, UK said:

 

Gotta respect Tepper! 

[Dinar]

What are people's favorite ideas among Chinese stocks and why?  Thank you.

[UK]

40 minutes ago, Dinar said:

What are people's favorite ideas among Chinese stocks and why?  Thank you.

 

LVMH:)? 

 

I like Tencent as a business very much and owning it via Prosus is even better I think. Maybe I would add also PDD, JD, perhaps even BABA.

 

Or maybe the simplest way is to just buy KWEB (internet stocks ETF)! which by definition would exclude banks in China. 

 

Or something like this: https://etfdb.com/etf/CXSE/#holdings

 

Edited September 26 by UK

[Sweet]

1 hour ago, UK said:

 

Love the interview but still not gonna buy China - even though he is probably correct.

 

Edited September 26 by Sweet

[Luke]

Tepper is willing to go 25% into China on Pullback, folks! Maybe i get greedy tomorrow and open up my 3x KWEB position again xD 

Edited September 26 by Luke

[Spekulatius]

The more I think about it the more I believe that the CCP putting money in banks is more of a salvage operation than stimulus.

For stimulus the CCP needs to give money to consumers who hopefully spend it, but that’s not what we are seeing here 

 

This seem tells us that the CCP is afraid of their financial system falls apart, just like when Congress decided on TARP in 2008.

 

Not exactly bullish.

[Luke]

3 minutes ago, Spekulatius said:

Not exactly bullish.

With all due respect, please look at the valuations. The stocks are trading at single-digit multiples, below commodity stocks in the US. They are growing WITHIN the highest macro stress since quite some time in the Chinese economy while buying back more stock than many US peers, expanding internationally, running very clean and lean companies with no "meta product marketing influencers," management not paying themselves ridiculous amounts of bonuses and buying their own stock...do you really think China will collapse and not be able to recover? On which stocks are you bullish in that case, and what do you own because you can't protect yourself from that scenario with most stocks? 

 

It just doesn't make sense to be constantly pessimistic while valuations are so depressed. Not even guys like Tepper can convince people to buy Chinese stocks because the hate is so huge. Who is not getting horny here with that amount of hate? Nobody wants to touch it, not retail investors, not your mom and dad (they buy Nvidia or Intel, lol), not most hedge funds, not value investors, not deep-value investors...insane!  

[Luke]

A lot of the debt China owes is to themselves; they have SO much room to privatize their country if necessary to get even through the worst of the worst. On top, they are super self-sufficient with supply chains. This country won't go away any time soon, and it will take a few years until things normalize. Meanwhile, you get paid 10-15% a year to wait. LOL.

[Hektor]

https://www.wsj.com/world/china/chinas-newest-nuclear-submarine-sank-setting-back-its-military-modernization-785b4d37

 

China’s Newest Nuclear Submarine Sank, Setting Back Its Military Modernization

Pierside accident came as Beijing attempts to expand its navy

 

China’s newest nuclear-powered attack submarine sank in the spring, a major setback for one of the country’s priority weapons programs, U.S. officials said. The episode, which Chinese authorities scrambled to cover up and hasn’t previously been disclosed, occurred at a shipyard near Wuhan in late May or early June.

 

[UK]

7 hours ago, Luke said:

Tepper is willing to go 25% into China on Pullback, folks! Maybe i get greedy tomorrow and open up my 3x KWEB position again xD 

 

Could you post a source of this? I was so dissapointed, he does not answered this question of Becky about limits for China in an interview.

 

Edited September 27 by UK

[UK]

12 hours ago, Spekulatius said:

The more I think about it the more I believe that the CCP putting money in banks is more of a salvage operation than stimulus.

For stimulus the CCP needs to give money to consumers who hopefully spend it, but that’s not what we are seeing here 

 

This seem tells us that the CCP is afraid of their financial system falls apart, just like when Congress decided on TARP in 2008.

 

Not exactly bullish.

 

I think you may well end up being right, but I would argue, that even if buying shares in US in Autumn 2008 was somewhat premature, it worked out quite good at the end. Regarding giving away money, if there is a politicall will, as it seems, they will do or try to do whatever is necessary, as things will progress (high chances they will have opportunitues for some more experiments). It seems that CCP really changed their mind on this and so we could be past a real market bottom in China. This is very bullish in my view, because everything is still crazy cheap. The problem though, and Teper refers to limits after Becky's question on geopolitics, that until CCP has not changed its position on Russia etc or at least there is some kind of new and stable (if this possible at all) understanding between US and China, how to coexist peacefully, at least until another elections:), you will end up playing some kind of Russian roulette here (ex some economical risks, but still loaded with geopolitical bullets) and I am not sure how to estimate this or do I want to play this with substantial amount of capital. Surelly 25 percent would be still too much for me at this time. So but in one way it looks much better now, but perhaps still a basket type case for me. But my thinking may evolve on this.

 

Edited September 27 by UK

[Paarslaars]

Yeah I was considering a basket approach a month ago as well but wanted to wait out the BTC rally to transfer funds from there to China stocks, guess China will go up first now.  Would not feel comfortable with > 10% position here though.

[UK]

2 hours ago, UK said:

 

Could you post a source of this? I was so dissapointed, he does not answered this question of Becky about limits for China in an interview.

 

 

Found it: 

 

[UK]

3 hours ago, Paarslaars said:

Yeah I was considering a basket approach a month ago as well but wanted to wait out the BTC rally to transfer funds from there to China stocks, guess China will go up first now.  Would not feel comfortable with > 10% position here though.

 

Basically if you look at KWEBs composition, this is mostly a basket you need, so I did not owned ETFs for ages, but in this case perhaps no need to overthink, it is easy to move in or out and you do not need to deal with Hong Kong jurisdiction and any possible spin offs etc. I think the same about allocation size as of today:)

 

Edited September 27 by UK

[Luke]

 

Highly efficient markets from 150 USD to 90 USD to 135 USD in 1 month, PDD

Edited September 27 by Luke

[mattee2264]

Annoying that the major China indices have bounced 50% off the bottom. But there was a similar bounce after the COVID intervention and a lot of people were expecting another leg down but the stimulus kept flowing and it never happened. 

 

And you are still paying only about 12x earnings which is over half the valuation of the US stock market. And with the US stock market you're already pricing in a resilient US economy and Big Tech dominance and a favourable low tax and low interest rate environment and many other positives which may not be sustainable. 

And even after the bounce the index is still trading at levels that were seen over a decade ago. Short term outlook isn't great but there are reasons to be optimistic about the long term prospects of the Chinese economy as they've made significant technological and scientific advances and are moving into higher-margin businesses. 

 

 

[moneyball]

3 hours ago, mattee2264 said:

Annoying that the major China indices have bounced 50% off the bottom. But there was a similar bounce after the COVID intervention and a lot of people were expecting another leg down but the stimulus kept flowing and it never happened. 

 

And you are still paying only about 12x earnings which is over half the valuation of the US stock market. And with the US stock market you're already pricing in a resilient US economy and Big Tech dominance and a favourable low tax and low interest rate environment and many other positives which may not be sustainable. 

And even after the bounce the index is still trading at levels that were seen over a decade ago. Short term outlook isn't great but there are reasons to be optimistic about the long term prospects of the Chinese economy as they've made significant technological and scientific advances and are moving into higher-margin businesses. 

 

 

My personal view is that overall economy in China is bad. 

 

But some of the tech companies are world class companies and are growing despite the overall economic picture. 

 

Two major risks in China are government not caring about economy and war/sanctions. I think we have more clarity now on risk one and positive reflexivity in the stocks. If government is willing to actually address economic issues then who cares that the market is up 20-50% from the lows because the stocks are de-risked and prospect for growth over next 5-10 years is higher which is what we are really playing for.

 

Even better given the actual/perceived mismanagement of the economy there are a lot of levers that can be pulled to increase the attractiveness of the stock market/market for investment.

 

I know there can be disagreement but I agree with Mr. Tepper. Also believe that given the prevailing view that China is un-investable there is a long way for fund flows to go if people get FOMO. 

 

I say all of this as someone who would never have invested in Chinese equities 3 years ago. 

[Dalal.Holdings]

Right now a lot of their actions seem geared toward helping the property sector including even buying unsold units... The problem is that there are just way too many property units in China and the people of China view real estate as their main investment vehicle over their own local stock market…China’s population cannot support so many real estate units and they are not a country with significant immigration.

 

The losses in real estate will not be easy to reverse. Boosting the stock market and corporate sector is certainly not what the CCP has prioritized lately and allowing their tech/corporate sector to flourish would be a 180 from since they purged Jack Ma.

 

Then there are other questions. Are they going to put their desire for Taiwan and all the other aggressive actions in the South China Sea on the back-burner to save their economy?

 

Tepper did well in the wake of the GFC, but China is not the U.S.A. The Chinese stock market has not historically served as the primary investment vehicle of its people and because the people lack a vested interest in it, it has been allowed to flounder. There has also been very limited progress in turning the economy into one driven by consumption.

Edited September 27 by Dalal.Holdings