Capitalist Roader Fund:
Since the Capitalist Roader’s last update, the Shanghai Composite Index (SCI) has been nothing if not exciting. In the end, however, all the volatility of the last few weeks left the SCI at its close yesterday down just a bit more than 1.2% from our last update, and the fund down just 0.9%. At midday on Friday, the SCI had risen another 0.5%.
China COSCO, (601919.SH), which has fallen the most – more than 28% – of any of our holdings (despite supposedly renewed optimism that China’s strong demand for commodities could help bulk shippers) is hoping to expand its business into terminal operations. As such, it invested US$520 million along with Crestway, a subsidiary of COSCO Pacific (1199.SH) in Sigma, the parent of Shenzhen Yantian Port (000088.SZ), giving it a 20.55% share.
Huaneng Power (600011.SH) is also in a spending mood, and has announced a US$1.2 billion deal to purchase wind turbines from domestic manufacturers.
At the close of trading on Thursday, the Capitalist Roader Fund was down 39.7% from June 3, 2008. The SCI was down 22.7% from June 3, 2008.
Red Dragon Fund:
We tried to take more advantage of the market volatility than our sister fund, selling 500 shares of China Merchants Bank (600036.SH) on May 13, and buying 200 more shares of Shanghai International Airport (600009.SH) on May 17. We turned around and sold 200 shares of Shanghai Airport on May 21, but should have held on a bit longer: At mid-day on Friday, shares were above RMB14, albeit down from Thursday’s close. But we can’t complain too much, as we still retain 800 shares of 600009.
PetroChina (601857.SH) has been mostly flat since our last update, but still has not recovered from its drop at the end of April.
At the close of trading on Thursday, the Red Dragon Fund was up 72.8% from August 19, 2005. The SCI was up 130.9% 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.