It’s been a busy week, and we haven’t paid as close attention to the markets as we would have liked. Of course, that has given the Shanghai Composite Index the chance to taunt our cash-only position by rising more than 7% this week while our backs were turned.
In the upcoming issue of China Economic Review, our arch-rival the Red Dragon Fund (which kindly refers to us as its “sister fund”) expresses “interest” in our recent sale of Industrial and Commercial Bank of China (601398.SH), and suggests the market could touch 2,400 points by April before falling again.
With the SCI at 2,281.09 points, 2,400 sounds well within reach. There’s a chance that investors are seizing on some less-bad data that could be seen as indicating the economy is on its way up. To wit: Property markets may be showing signs of a rebound (or at least a bottoming out), retail sales are doing OK, and manufacturing numbers are showing less contraction.
But there’s still contraction. While some numbers could be seen as giving reason for hope, many more suggest that we have a ways to go before the economy can be said to be in good shape. Of course, that doesn’t mean the market won’t keep chugging along for a while, but it’s running on vapors.