After last week’s history lesson in reverse, the SCI has spent this week firmly planted in the 18th century. To drop a tired metaphor, it didn’t rise above 1,800 points all week and currently finds itself at 1,728.79. What has been going on?
Beijing hasn’t been standing aside – there was of course the 0.27-percentage-point rate cut announced on Wednesday, and reports suggest that regulators are continuing to (ahem) encourage big firms to buy more shares. In this case, it was insurers, who have already been posting significantly thinner profits thanks to investment losses. They no doubt reacted less than enthusiastically to the official suggestions.
The markets seem to be stubbornly refusing to follow Beijing’s lead, and have been exhibiting a flightiness that indicates, to our eyes, investors trying to make a quick buck, especially after the sharp falls on Monday.
The big surprise? Anhui Conch Cement (600585.SH). It’s up about 13% (to RMB16.96) since Monday’s close, even as the market flounders around it. Coincidentally, that’s about how much Anhui Conch’s profits grew in the third quarter of the year (announced last week), thanks to higher output and cement prices.
It’s been so long since we saw Anhui Conch move anywhere but down, we’re frankly not sure what to make of it – the profit connection is tenuous, at best, since these share gains are coming more than a week after profits were announced, and Anhui Conch has already forecast lower cement prices for next year.
On the other hand, it was a bad week for Industrial and Commercial Bank of China (ICBC, 601398.SH). Its announcement of slower profit growth hurt its share price, which fell 0.01% today to end the week at RMB3.62.
So how fares the Fund overall? Make sure you’re sitting down: We’re up about 0.2% from last week, while the market has fallen 6%. We are now officially performing less badly (down 49.4%) than the market (down 49.6%) since we started on June 3. Champagne!