By..Nattha Mahattana, CFA Assistant Managing Director
Investment Strategy and Client Relations Department, Krung Thai Asset Management Co., Ltd.
two giants fall Fear-ridden headlines about Country Garden and Evergrande’s debt situation have hit the Chinese market in recent weeks. Investors are worried that crises of confidence will spread to destroy other real estate developers as well If stock and bond prices fall for a long time, the group will close funding channels. And if the public is so worried that they don’t dare to buy a house The income stream is shrinking … completely dead.
some facts from regular news updates without eggs
Evergrande Filing for Chapter 15 bankruptcy protection in the US is just a “normal step” towards the end of the debt restructuring process. This is because dollar-denominated bonds are regulated by New York law.
Country Garden The plan to extend the maturity of the onshore debentures has been completed. Schedule a meeting with creditors Aug. 23-25.
Zhongrong Trust Informed the official media of the Bank of China that The Company Group continues to operate as usual.
When faced with a crisis, think of a solution. “China’s real estate crisis” passed the worst point since 2 years ago, at that time the Chinese government focused “Reducing the risk” Implementing a strict policy forcing to reduce debt in the system But now it’s the opposite! China’s economy has barely recovered from lockdown this year and faced with various frictions, so weak that it is at risk of deflation. Therefore, efforts to “stimulate growth” must be a top priority.
policy response (policy response) is what investors should be interested in. (Not just being too afraid and asking questions What if the Chinese economy collapses?) Measures from the Chinese government and central bank should aim to shut down the escalation of the problem (at least two in the first paragraph), including:
1. Support the rise in Chinese stock and bond prices. as well as taking care of the yuan’s value to be stable. stimulate the desire to buy a house By aiming to reduce the burden and regain the confidence of buyers.
China has sent a clear signal and has given birth to many measures. “right direction”
+ Politburo sends Sikh to open the way for speculation in real estate Clearly indicates that he wants to “sculpt” the stock market up.
+ PBOC “surprise” several policy rate cuts ordered the state bank to support the yuan
+ Many cities relax home buying restrictions Reduce the down payment for the second home reduce the minimum interest
+ CSRC (China SEC) reveals measures to pump the market, such as reducing trading costs, supporting share repurchases.
+ Chinese stock market Asking for the cooperation of many stock funds to refrain from “net sales”
Fiscal stimulus policies take several months. until the results appear on the economic data Securities prices (stocks and bonds) should reflect future expectations. without having to wait to see the numbers We believe that the “real” pressures for the Chinese market over the past few years have been the strength of the dollar and the sharp rally in US bond yields. While traders seize the moment to beat the Chinese market by claiming weak economic data (looking back) and tensions in the real estate sector (Passed by peak a long time ago prevent it from spreading)
Consider the latest information for a reason. “Looking ahead” with a focus on Policy Response We therefore see an “opportunity” to invest in Chinese stocks, Chinese bonds and the yuan because we believe that upside > downside is significant.
Note: Those who already have too many Chinese funds should diversify their risk to invest in other markets.
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Warning:
personal opinion not investment advice past performance It is not a guarantee of future performance. understand product characteristics return conditions Investment Guide and risks before investing All opinions are personal views. It is not related to the house view of any asset management company, bank or organization. The Belief Allocation Portfolio and Today Strategy are aligned with the personal view of item 2, both investing style. “Extreme-without limits” is therefore very risky and very different from conventional asset allocation. Those who want to do asset allocation in a conventional way should consider the Mung | Mee | Sri | Suk or KTWC funds.
2023-08-20 06:50:01
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