HK/China market update 中港股市月報(Nov 30)

Share with you the market update on HK/China brought to you by BASE Asset Management Company Limited in English, Traditional Chinese.
 
各位,您好。這是由「基智資產管理有限公司」送上的「中港股市」月報。敬供參考(英文和中文版)。
 
Market Update 
 
In the last month, we saw a huge divergence between China and Hong Kong market, with China A-shares hit the new record yearly high (up 11%) but Hang Seng Index fell (HSI) into a range trading pattern with no gain at all (0%). This kind of market performance is fully matched with our previous forecast that A-shares market would continue to outperform HSI and our strategy of putting high weighting on the A-shares ETFs since July proved to be right also. 

We believe most of our clients can still recall that we are one of the few to buildup abullishview on China since April even though the market sentiment was extremely poor at that time in afraid of the burstof China’s trust product bubble. In our April’s report, we stated: 
 

“Although this restructuring process might take a longer time to see the success, we still don’t expect a hard landing or national financial collapse in China in the near term. We believe investors are overly bearish on China at this moment. Sooner or later, we believe investors will regain some confidence and re-rate China in the coming future”.


Now, in about six-month time, we really see both China domestic and foreign investors are starting to regain confidence in China. Since April to November, China’s A-shares were up almost 40%, H-shares went up 14%, and HSI went up 8%. This outcome does refresh my memory on a famous quote from Warren Buffett: “Be Fearful when Others are Greedy & Be Greedy when Others are Fearful”. We admire this quote and we are not just applying this philosophy on our stock selection level but also on the asset allocation level.

Going forward, we don’t have anything to change on our bullish fundamental view on the overall China and we expect the equity markets will continue to be rerate upward gradually. However, in terms of individual index performance within the China and HK region, we might see divergence between different indexes. In the longer term, we believe both A-shares (possible some minor corrections in short to medium term) and H-shares will continue to outperform the Hang Seng Index as the former two indexes are highly leveraged on China’s positive structural reforms while Hang Seng Index will be dragged by the HK domestic companies with slowing growth momentum. 

Recently, many people gave a reason for the sharp rebound of the A-share markets was mainly due to the cutting of the interest rates in China. However, we think in the opposite way that the above argument is to put the cart before the horse. Indeed, we believe the reason for the cutting of the interest rates was mainly for the purpose of pushing up the A-share markets. Why? It is because there are some strategic objectives for the A-shares to go higher. Firstly, central government would like to encourage corporates to get financing through the equity market instead of heavily relying on the bank and debt financing; Secondly, in order to attract more than US$300 billion going into China shares through the inclusion of Chinese stocks into the MSCI index next year, they have to burn up the A-shares markets so as to make the Shanghai-HK stock connect scheme to be successful. Last but the most important point is to create the wealth effect so as to stimulate the domestic spending in order to offset the negative economic impacts from the depressing property markets. If our thinking is true, we cannot rule out that we might see a sustainable bumpy rally in the China’s A-shares markets. 

 
Even though our call in China remains bullish, we still cannot neglect the global systematic risk level. After China decided to start the rates cut cycle and stop using the reverse repo operation to drain the excess liquidity in the system recently, we believe 2015 could be a growth supporting year for China and that could moderate easing the global systematic risk level in some extent. Apart from that, we start to see some signs showing the US$ might weaken soon and that will ease the threat from the unwinding of US$ funded carry trades and massive liquidity outflow from Asia. For example, the Fed vice chairman, Stanley Fisher (an influential man within the Fed and being the mentor of ex-chairman Bernanke and ECB President Draghi) said in days ago that the Fed might leave rates unchanged next year if there is low inflation (oil price already drops 40% from the peak). In addition, ECB president Draghi seems to face opposition and insufficient support from the Board for implementing the QE program. We believe all those signals might ease the continuous upward pressure on the US$ in the short to medium term. Having said that, the risk level drops moderately doesn’t mean it’s gone. We still believe a long term rising trend of the US$ is still possible and the recent sharp increase in the Russia’s sovereign debts CDS to three-year’s high level did raise our concern on the debt default risk in Russia. As such, we won’t keep raising cash further as planned but intents to hold the cash at current level of around 20%-25%. 

 
投資組合回顧
 
在過去的一個月裡,我們看到了中國和香港市場之間的表現存在很大的分歧。中國A股市場在十一月創了年內新高(上升11%),但恆生指數(HSI)仍在一個窄幅區間內橫行,沒有任何進漲(0%)。這種市場表現其實完全符合我們之前的預測,那是A股市場將繼續跑贏恆指。而我們自七月起大比重加注至A股ETF的策略,被證明是正確的。
 
我們相信我們大多數的客戶仍然記得我們是少數在四月份便開始看好中國前景的投資者,盡管當時的投資氣紛是極度負面和擔心中國的信託產品泡沫將會爆破。在我們四月份的報告中,我們指出:

"雖然本次重組過程可能需要一段長時間才能看到成功,我們仍然不相信在短期內中國會硬著陸或出現國家金融崩潰的情況。我們認為,投資者現對中國的看法是過度悲觀。我們相信在不久的將來,投資者最終將對中國重拾信心"。

現在,大約經過六個月的時間,我們真的看到中國和國外投資者已開始對中國重拾信心。自今年四月至十一月,中國的A股上漲了近40%,H股上漲14%,恆生指數上漲8%。這結果令我們回想起巴菲特的一句名言:“當別人貪婪時要感到恐懼,和當別人恐懼時要貪婪”。我們讚賞這句話,不只是將這種理念套用在我們的選股策略上,並套用在我們資產配置策略之上。

展望未來,我們對中國整體正面的基本面沒有什麼改變,我們仍然預計整體股市仍將逐步被向上重估。然而,在中國和香港地區內的個別指數表現來看,我們可能看到不同指標之間存在不同的表現。從長期來看,我們相信中國A股(短期至中期內可能出現小幅的調整)和香港H股將繼續跑贏恆生指數,因為前兩者的指標有較多公司是受到中國正面的結構性改革所影響,而恆生指數指數卻受到-些增長放緩的本地企業所拖累。

最近,很多人都說A股市場的大幅反彈主要是由於中國突然下調存貸利率。不過,我們從相反的方向去想,我們認為上述的說法是本末倒置了。事實上,我們反而相信,下調利率的原因,主要目的是為了推高A股市場。為什麼呢?這是因為A股的上漲是有其策略性目標。首先,中央政府希望鼓勵公司能多通過股票市場作融資渠道,不再需要像以往般單靠銀行和債券市場作主要融資渠道;其次,為了明年能夠把中國納入MSCI指數中並吸引每年多達3千億美元的資金流入中國股票市場,中央政府是有需要活化起A股市場,從而使剛推出的滬港通政策達到理想的效果。最後,但最重要的一點是創造財富效應,從而刺激國內消費,以抵消呆滯的房地產市場對經濟的負面影響。如果我們的想法是對的,我們不能排除中國的A股市場將會出現一個充滿波動性的持續反彈浪。

盡管我們對中國的前景依然看漲,我們仍不能忽視全球系統性風險的水平。在中國決定啟動降息週期,並停止使用逆回購操作吸納市場過剩的流動性後,我們認為2015年是中國支撐經濟增長的一年。所以在某程度上,中國適度的放寬貨幣政策能在一定的程度上減輕了全球系統性風險水平。除此之外,我們開始看到一些跡象顯示美元可能
會有機會呈現短暫弱勢,這將舒緩由美元融資套利交易拆倉和大量資金流出亞洲的威脅。這些跡象包括:i)美聯儲局副主席,斯坦利費舍爾(他是一個在美聯儲局內非常有影響力的人,並且是前主席伯南克和歐洲央行行長德拉吉的導師)在幾天前表示,在低通脹(石油價格已經從高位下降40%)的環境下,美聯儲局可能在明年仍維持利率不變;ii) 此外,歐洲央行行長德拉吉在歐央行內對其實施量化寬鬆政策似乎面對很大反對聲音和不能得到足夠的支持。我們相信,所有這些信號可能會緩解短期至中期內對美元持續升值的壓力。說了這麼多,盡管全球系統性風險水平適度的緩和,並不意味著全部已消退了。我們仍然相信長期的美元上升趨勢風險仍是可能的,加上近期俄羅斯的主權債務CDS升至三年高位,這使我們更加需要關注俄羅斯的債務違約風險。因此,我們雖然不會按計劃再增持現金至更高水平,但仍然會維持現有水平大約為20%-25%。
(*BASE,基智資產管理有限公司於2011年設立,專門管理客人專戶投資組合,特別為客人設計投資策略。投資團隊有三位成員,在資產管理行業經驗共超過50年。)

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