The market got splashed with cold water this week, with the Shanghai Composite Index dropping around 3.5% from last week to finish at 2,838.84. The source of the wake up call is investors’ concerns over the four initial public offerings approved for China’s new Growth Enterprise Market (GEM) board for small cap stocks in Shenzhen. The GEM board isn’t supposed to start operating next month but investors are already worried the new IPOs will dampen stock prices for established companies listed in Shanghai and Shenzhen
This has had a slight effect on our holdings as well. China Vanke (000002.SZ) dropped this week, down 8.5% from last week’s close but Jiangsu Expressway (600377.SH), on the other hand, has danced sideways through the week and remained stable.
We’re going to take a page from Jiangsu Expressway’s book for the next couple of weeks. With the eight-day National Day break and China’s 60th birthday celebrations starting in less than a week, we’re going to take a step back and let the investors clear the visions of military parades from their heads before we jump back into the market.
You must log in to post a comment.