The Shanghai Composite Index (SCI) is back up over 3,300 points (3,317.41, to be exact) thanks to strong manufacturing data and the Politburo’s statement that macro policy for 2010 would remain basically unchanged from this year. With talk of US$1 trillion in new loans to be issued next year, investors can rest assured that there will be plenty more money around to be re- or mis-directed into the stock market.
The fear of asset bubbles is real, though, and the Politburo didn’t entirely rule out the possibility of tightening in 2010. With all the residual uncertainties, we still don’t see the SCI showing a sustained rise this year.
We remain happy that we sold Jiangsu Expressway (600377); the small Disney-fed rally that prompted our sale hasn’t held up, and the company’s shares are now trading down a few fen from where we exited.
Some interesting news on the China COSCO Holdings (601919) front. Captain Wei Jiafu, president and CEO of the company, has gone on record as saying he supports the development of nuclear-powered container ships – and that COSCO is actually in talks with nuclear authorities in China about developing them.
It’s certainly a novel approach to dealing with the significant carbon emissions of the world’s merchant fleet, though as some have pointed out, the prospect of Somali pirates capturing a nuclear-powered vessel does raise some questions. In any case, COSCO’s shares ended the week at RMB15.28 (US$2.23), up more than 6% from when we bought in.
China Vanke (000002) hasn’t done as well, but ended the week on a positive note, gaining 3.37% to close at RMB11.97 (US$1.75). The company said it is going ahead with plans for a US$1.64 billion A-share offering in the first half of 2010 to raise money for new projects and supplement its working capital.
The Capitalist Roader Fund is down 25.59% from June 3, 2008. The SCI is down 3.4%.