Capitalist Roader Fund
This week a collective torpor settled over Shanghai as the pipin’ hot peak of summer (the ‘San Fu" season) leveled productivity and enforced apathy toward all human endeavors unrelated to sitting and drinking cold beverages. Mashed flatter than mint in a julep by the sweltering boil, we sat astonished with said beverage in hand and watched the Shanghai market post four straight days of gain, followed by a mild corrective sell-off on Friday.
China COSCO (601919.SH) rose 4.47% this week, lifted somewhat by its predictions that it will return to profitability in the first half as shipping volumes recover. Guangshen Railway (601333.SH) is also up 4.55%, but Huaneng Power (600011.SH) only gained 2.95%. If only inactivity was always so rewarding.
Red Dragon Fund
We sold China Merchants Bank (600036.SH) on Friday at RMB14.34 locking a profit around 12%. This wasn’t because we have become bearish on the stock; rather we noticed an outflow of funds from institutional investors recently and didn’t want to get caught on the wrong side of a slide. Shanghai International Airport (600009.SH) is rallying after the company reported a 48% increase in traveler traffic and a 36% increase in cargo business in June compared with the same period last year. We expect to significantly mitigate our floating loss on Shanghai International Airport in the coming days. As of Thursday, the Shanghai Composite Index (SCI) closed up five days in a row a row – we’ll look to re-engage once the inevitable modification kicks in.
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.