Capitalist Roader Fund:
The Shanghai Composite Index (SCI) is down 0.8% from Monday and is down for the morning as continued uncertainty over the end of the renminbi peg, rising worker wages and the continuing European debt crisis keep cash off the table and markets favoring the status quo.
The Capitalist Roader Fund was down 41.3% from June 3, 2008 at the close of trading on Thursday. The SCI was down 25.3% from June 3, 2008.
Red Dragon Fund:
No trade made this week. We get some floating profit on China Merchants Bank (600136), but the market is clearly bottoming and we believe the revaluation of the banks has just begun. With the financial sectors continues to outperform, patience is what we need now.
The historically low trading volume of the A-share market indicates that it will consolidate for some time before a widely expected rally. The IPO of Agricultural Bank of China is one of the key factors for the current market. Analysts believe it will add more pressure to the market should its IPO price be set at more than RMB3.00RMB or even RMB3.50. We also continue to focus on the revaluation progress of the renminbi.
At the close of trading Thursday, the Red Dragon Fund was up 58.8% from August 19, 2005. The SCI was up 123.2% 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.