Capitalist Roader Fund:
The Shanghai Composite Index (SCI) was down 0.07% this week, a rather muted reaction even as anticipation of currency revaluation hits a fever pitch. Huaneng Power (600011.SH) fell 1.6%, and Guangshen Railway (601333.SH) fell 1.3%. China COSCO (601919.SH) was basically unchanged for the week at a 0.2% loss.
The Roader, like most observers, will be keeping a close eye on the market as revaluation rumors swirl, and next week may be poised to seek a new investment that will benefit from a stronger renminbi.
The Capitalist Roader Fund is down 35.0% from June 3, 2008. The SCI is down 8.4% from June 3, 2008.
Red Dragon Fund:
The Red Dragon Fund sold Jiangxi Ganyue Expressway (600269.SH) on Friday at a slight loss – as we have said, it was always going to be a short-term trade. We think Ganyue is a good choice for a long-term investment, but we don’t have any long-term plans right now since we’re bearish on the general equity market.
There are reports that property taxes will be implemented in four major cities: Beijing, Shanghai, Shenzhen and Chongqing. This is further evidence that the central government is unhappy with housing prices continuing to rise after the annual joint session of the NPC and CPPCC back in March. More remarkably, the Xinhua news agency recently published six articles lashing out at an overheating property market. It was widely considered a red card from Beijing.
The Red Dragon Fund is up 103% from August 19, 2005. The Shanghai Composite Index is up 173% 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.
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