The Shanghai Composite Index (SCI, 000001.SS) recovered from mid-week lows to finish 1.3% up from its Monday opening. China COSCO (601919.SS) finished similarly level for the week, despite announcing that it was increasing its transatlantic shipping rates. Huaneng Power (600011.SS) was equally unexciting with a sliver of a weekly increase after falling from Thursday highs surrounding the opening of its new Weifang wind farm.
With the National People’s Congress just around the corner on March 5, the Capitalist Roader is taking the time leading up to the event as a chance to speculate on the future direction of China’s macroeconomic policy. While there may not be any overwhelming surprises announced, just having China’s leaders discuss the possibility of directing new investment to a specific industry or region has been enough to drive related stock prices to significant gains, so we’re going to put our chips on the table and see if we can guess what’s going to get the rubber stamp. Expect a buy next week.
The Capitalist Roader Fund is down 34.7% from June 3, 2008. The SCI is down 11.2% from June 3, 2008.