The Shanghai Composite Index (SCI) was steady this week, unresponsive to predictions it is currently overpriced and is 
likely to sit closer to 2,500 points in the short-term, implying an average profit-to-earnings ratio of 20. This is a far cry lower than the close of 3,187.65, up only 0.8% for the week, and we at the Roader Fund are very cautious of investing any further capital at current prices.
Trading on margin was a hot topic for the week, with investors expecting the market regulator to make an announcement soon. Some analysts are saying the Chinese stock market is sufficiently mature, and margin trading could be as close as next year. This will be an important change for the market, and one we are patiently waiting to hear more on.
No news is bad news for Jiangsu Expressway (600377.SH) and China Vanke (000002.SZ) this week. The pair trailed the greater market by 1% and 3.1% respectively. Vanke in particular has been particular slow the last few weeks, but the company’s positioning is still good. If the market slows as predicted, there may be an opportunity to increase our position as we have faith in the developer to keep doing what it does best. Vanke finished off at RMB11.81 (US$1.73) and Jiangsu Expressway at RMB6.41 (US$0.94).
Our most recent acquisition in China COSCO Holdings (601919.SH) is sailing ahead of the fleet, putting on a further 6.39% over the week to dock at RMB15 (US$2.20). This corresponds to a 14.1% gain in the last two weeks, indicating the market knows this shipper is heading out of its recent loss-making period and into more profitable waters.
The Capitalist Roader Fund is down 26.64% from June 3, 2008. The SCI is down 7.24%.
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