Capitalist Roader Fund:
There’s little good news on any front for the Capitalist Roader. The Shanghai Composite Index (SCI) is down (closing at 2,552.66 yesterday, and falling again this morning), the domestic economy may be slowing and if there is slightly less hand-wringing about the crisis in Europe, it’s because of fatigue – those hands get tired after a while – rather than a fundamental improvement in the situation there.
China COSCO (601919.SH) was down about 5% from Monday by the close of trading on Thursday, Huaneng Power (600011.SH) was down 3%, and Guangshen Railway had fallen nearly 4%. Those performances are all more-or-less in line with the SCI’s 3.8% Monday-to-Thursday fall.
European markets seem to have enjoyed a small boost on stronger data from the US, but Chinese investors aren’t sharing the same enthusiasm. We haven’t decided if we should take advantage of the slump, or if we should be perfecting our hand-wringing technique for a renewed sell-off.
The Capitalist Roader Fund was down 40.8% from June 3, 2008 at the close of trading on Thursday. The SCI was down 25.7% from June 3, 2008.
Red Dragon Fund:
No trades for this week. The A-share market is still under pressure. A key factor is the lack of new funds entering the market as investors stand aside to watch how the situation develops, and as the market continues to grow. The SCI tried to break 2,600 and failed.
Are we in the middle of the plunge? Obviously, the market is a policy-oriented one now. May’s consumer price index will be watched closely as investors ponder a possible interest hike. In any case, we do not expect a remarkable rebound in the short term.
At the close of trading Thursday, the Red Dragon Fund was up 58.8% from August 19, 2005. The SCI was up 121.9% from August 19, 2005.
The Red Dragon Fund launched in August 2005 and is run by an industry professional. The Capitalist Roader Fund launched in June 2008 and is run by China Economic Review’s editorial team. Both funds are run solely as an editorial exercise.